Crypto VC Investment Set to Increase in 2025 Amid Growing Demand for Stablecoins and Real-World Asset Tokenization
In an interview with Cointelegraph, Deng Chao, CEO of institutional asset manager HashKey Capital, shared his insights on the crypto market’s prospects for 2025. According to Chao, venture capitalists (VCs) will continue to increase their investments in crypto projects next year, driven by the growing demand for stablecoins and real-world asset tokenization.
Growing Demand for Stablecoins
One of the key drivers of VC investment in crypto projects is the increasing popularity of stablecoins. As Chao explained, dollar-pegged stablecoins are being used as a store of value by individuals in emerging market economies where local fiat currencies are rapidly depreciating or subject to strict capital controls.
The use case for stablecoins was strongest in 2024, and VCs were increasingly focused onstablecoin usage in emerging markets.
Stablecoins have several advantages over traditional banking services, including cheaper fees, near-instant finality times, and no requirement for a bank account. These features make them an attractive option for individuals who lack access to adequate banking services, particularly in developing countries.
The Problem of Unbanked Populations
According to the World Bank, an estimated 1.4 billion people worldwide lack access to adequate banking services. This is largely due to insufficient infrastructure in developing countries, which can be addressed by smartphones with internet access and crypto wallets.
Cheaper fees, near-instant finality times and no bank account required make dollar-pegged stablecoins a viable method of providing banking services to the unbanked.
Real-World Asset Tokenization on the Rise
In addition to stablecoins, real-world asset (RWA) tokenization is another area that VCs are increasingly focusing on. RWA tokenization involves converting traditional assets such as government securities, stocks, corporate bonds, and collectibles into digital tokens on a blockchain ledger.
The real-world asset tokenization sector, which includes government securities, stocks, corporate bonds, stablecoins, collectibles or any other asset tokenized on a blockchain ledger, is projected to reach up to $30 trillion by 2030.
VC Investment in Crypto Projects: A Growing Trend
Market analyst Infinity Hedge predicted that crypto VC investment will surpass last year’s levels but won’t approach the peak recorded during the 2021 bull market. According to data from PitchBook, VC investments in crypto projects are projected to grow to $18 billion in 2025.
Crypto companies raised approximately $13.6 billion in 2024 compared to $10.1 billion in 2023.
A recent report from Galaxy Digital also forecasted that VC investments in crypto projects will grow by 50% year-over-year in 2025 but fail to reach the highs established in 2021-2022.
The Future of Crypto VC Investment: A Mixed Outlook
While there is growing demand for stablecoins and RWA tokenization, Chao cautioned that macro risks such as geopolitical tensions or increased deficit spending could increase price volatility and uncertainty in the new year.
Despite the optimistic outlook, the CEO cautioned that macro risks, including geopolitical tensions or increased deficit spending, could increase price volatility and uncertainty in the new year.
In conclusion, VC investment in crypto projects is expected to continue growing in 2025 driven by the increasing demand for stablecoins and RWA tokenization. However, it’s essential to be aware of the potential macro risks that may impact the market.
Key Statistics:
- An estimated 1.4 billion people worldwide lack access to adequate banking services.
- Stablecoins have several advantages over traditional banking services, including cheaper fees, near-instant finality times, and no requirement for a bank account.
- The real-world asset tokenization sector is projected to reach up to $30 trillion by 2030.
- VC investments in crypto projects are projected to grow to $18 billion in 2025.
