Among other things, 2024 has seen an undeniable glow in the cryptocurrency industry, both in terms of... Market power and Political reputation. Now other sectors have taken into account again, creating what could either be a rehash of the 2021 cryptocurrency bull market, or something else entirely.

At the end of each year, Decryption You look at the Crypto Crystal Ball to predict what narratives are likely to shape the coming year, and how they are likely to affect you.

After examining Donald Trump's cryptocurrency agenda and the odds that Ethereum's upcoming update will lead to widespread adoption, here's a look at how cryptocurrencies' relationship with venture capital is poised to change in 2025 — and what the shift might mean.

Back in 2021, cryptocurrencies were the belle of the venture capital ball. But once the digital asset market collapsed, our industry suddenly became new Undesirable character On Wall Street and in the Bay Area. There was no mention of cryptocurrencies or NFTs washed From project formations like the black plague.

Now that cryptocurrency prices are finally rising again, it appears that venture capitalists are already trying to get back together with blockchain developers — and pretend the breakup never happened.

Both venture capital giant Andreessen Horowitz and popular Silicon Valley startup incubator Y Combinator Announce In December, they were once again eagerly seeking support for cryptocurrency-related projects in 2025.

Of particular interest are projects related to stablecoins. Luke Gibb, Head of Digital Labs at American Express, said: Decryption That 2025 “will mark a pivotal year for the stablecoin industry” that could “transform the payments landscape.” In fact, Y Combinator is specifically looking for startups related to stablecoins.

Why the sudden shift? Turner Novak, a technology-focused venture capitalist, believes the answer is quite simple.

“Venture capital firms are chasing momentum,” Novak said. Decryption. “They will always come back if prices go up.”

But should cryptocurrencies be so quick to recoup investment capital, years after being dumped?

Alexander Lin, a blockchain-focused investor in Paraphraseinsists that the industry must resist this impulse. As Lin sees it, the lesson of the recent bull cycle is that venture firms spent billions of dollars in worthless cryptocurrency projects to make a quick profit, and the industry suffered badly as a result.

“They invested in frivolous projects, founders with inconsistent incentives, and projects that had the sole priority of launching a token quickly,” Lin said. Decryption.

It makes sense why, Lin said. Investing in such projects has allowed investment firms to avoid years of waiting for an acquisition or IPO to turn a profit. If these companies get into a cryptocurrency project early, hype it up, and then exit shortly after the token launch, it doesn't matter whether the token — and the project —It crashed Months later. The maneuver was successful on the venture capitalist's balance sheet.

If traditional venture capital firms have learned one thing from the recent cryptocurrency bull cycle, Lin said, it's not to invest in solid blockchain companies that will grow over time; It would instead be an early entry into projects fueled by speculation.

Lin believes that this cycle, if repeated, could harm cryptocurrencies' long-term prospects. To prevent such an outcome, he says it is necessary for cryptocurrency projects to reject investors looking to wet their beaks with the cryptocurrency stream. 3 trillion dollars Market value; Instead, projects should only collaborate with backers focused on growing cryptocurrencies to a $20 trillion market cap, he said.

“You can't get there by investing in memes, that's for sure,” Lin said. “You can get there by investing in greenfield infrastructure companies.”