As 2025 approaches, how do capital players view the development and potential opportunities in the crypto market?

As the bells of 2025 are about to ring, the encryption industry is ushering in a new development node. In the just-concluded year of 2024, the market experienced recovery, innovation, and adjustment, with leading projects continuously solidifying their positions, while emerging tracks quietly rose, laying the foundation for the future. Throughout the ups and downs of this year, venture capital, as a barometer of industry development, not only witnessed the changes in the market but also shaped the direction of the industry at the intersection of capital, community, and technology.

Standing at the starting point of 2025, we invited more than ten top venture capitalists to share their observations and thoughts on the encryption industry. They reviewed the highlights of the past year, analyzed the current market opportunities and challenges, and made predictions about future development trends. In this rapidly changing field, which projects and sectors are becoming the focus of venture capitalists? Let's step into the perspective of venture capitalists and explore the "yesterday, today, and tomorrow" of the encryption industry.

The Most Impressive Projects of 2024

In the past year, the crypto industry has welcomed a new wave of growth driven by the dual forces of market recovery and technological innovation. From infrastructure upgrades to breakthroughs in emerging sectors, countless projects have emerged this year, showcasing strong vitality and innovative potential. Some of these projects, with their unique technological paths or business models, have not only attracted significant attention but have also left a profound mark both within and outside the industry.

The founder and CEO of a well-known venture capital firm pointed out that Hyperliquid initially started as a high-performance decentralized exchange for perpetual contracts, attracting a large number of users while maintaining trading execution speed and liquidity. In addition, the tokens launched by Hyperliquid have not been venture capital-backed or listed on centralized exchanges, becoming one of the most successful airdrops in crypto history. "The platform is expanding its products and launching its own HyperEVM ecosystem, which includes many native decentralized applications to increase the utility of its spot ecosystem. The platform earns substantial fees through on-chain clearing and market making, gradually eating into the market share of leading DEXs and CEXs."

Another co-founder of a venture capital firm also highly praised Hyperliquid, being impressed by its market share, community airdrop and distribution mechanism, and wealth effect. Additionally, he mentioned Pump.fun—the most successful Meme coin launch platform this year. Compared to existing platforms on the market, Pump.fun successfully elevated the concept of "Meme launch platform" to a top narrative and ignited a frenzy in the Meme market. The venture capital firm stated that the takeaway from Pump.fun is that Web3 projects can achieve success by building products that truly have practicality, high user experience, and market fit.

The CEO and co-founder of a well-known platform stated that the revival of mature lending protocols in the DeFi space such as AAVE and Compound, along with the emergence of high-quality newcomers like Morpho, Euler, and Ajna, is exciting. Although DeFi has not received as much attention in the current cycle as it has in the past, the understated success of these protocols is still very worthy of attention and tracking.

Among the answers provided by various venture capitalists, Pudgy Penguin is one of the most frequently mentioned projects. The founder and CEO of a certain institution praised Pudgy Penguin, believing that it has single-handedly driven the revival of the entire NFT track. "As a first-round investor and Pudgy NFT holder, I fully felt the powerful energy emanating from Luca as a representative of the new generation of entrepreneurs with a blend of Web2 and Web3 thinking, which also solidified one of my fundamental principles: Invest in the next generation."

"Ethena has performed excellently in the DeFi space with its USDE stablecoin, profitably establishing 1x long and 1x short positions on centralized exchanges to benefit from high funding rates." A partner from an institution stated that Ethena's collaboration with the BlackRock BUIDL fund ensures that the USDE can maintain stable returns even when funding rates are negative, further consolidating its long-term viability.

How will the market trend of Bitcoin unfold?

Bitcoin has shown remarkable growth momentum in 2024. As of December 31, 2024, the price of Bitcoin has increased by a total of 119.1%. This surge is mainly attributed to the institutional adoption of spot ETFs, the halving event in April, and the market's optimistic sentiment following the U.S. elections. Looking ahead to 2025, a co-founder of a venture capital firm believes that the Bitcoin bull market is likely to continue, with a breakthrough of $200,000 next year being a high probability event. He stated that as the market matures, the supply-demand relationship of Bitcoin will further strengthen, and Bitcoin priced below $50,000 may become a thing of the past in future bull-bear cycles.

Regarding the upper limit that Bitcoin can reach next year, a certain research analyst holds a similar view, primarily judging the top through the technical indicators Pi Cycle and 2Y MA Multiplier. He stated that historically, the times when these two indicators resonated were: December 5, 2013, December 16, 2017, and the most recent occurrence of the Pi Cycle top signal on April 12, 2021. According to historical data, these indicators have high reference value. The analyst pointed out that based on the estimation of the 2Y MA Multiplier, the top for Bitcoin could be around $200,000. Both of these signals have ready-made indicators available on TradingView, which can be set for alerts, making them convenient for top judgment and position reduction decisions.

"If we take a cautious perspective in forecasting, I believe the next peak for Bitcoin may reach between $120,000 and $150,000, followed by fluctuations between $100,000 and $150,000." A certain investment manager stated that based on remarks made by a political figure regarding the establishment of a Bitcoin strategic reserve policy, assuming the market value of gold remains unchanged, as long as Bitcoin's market value does not surpass that of gold, Bitcoin can be considered a growth asset, with its price potentially reaching $600,000 per coin, but this process may take 5 to 10 years.

The investment manager stated that during the previous halving cycle (, which was in May 2020, Bitcoin experienced a slow rise and reached its first peak in April 2021, climbing from about $9,000 to $65,000. From April to July, Bitcoin's price saw a significant correction due to the impact of the "519 incident." However, the market then welcomed a second wave of increases, eventually reaching the highest point of the previous cycle. If we take the price on the halving day of this round as a baseline, it may signal the beginning of a new round of increases. It is expected that Bitcoin may experience a slight decline or sideways consolidation between the end of 2024 and the first quarter of 2025, before entering a second wave of increases, at which point the price may reach between $120,000 and $150,000.

"Unlike in the past, the current market dynamics will be profoundly influenced by multiple factors, the most critical of which include the external liquidity brought by the Bitcoin spot ETF and the continuous capital inflow driven by future Bitcoin reserve policies." This investment manager believes that this means that from now until the peak next year, the Bitcoin market may not experience significant corrections, but will instead maintain a trend of fluctuating upward, gradually moving towards higher price levels.

In the topic of Bitcoin, a certain investment director quoted the words of a co-founder of a well-known company: "Spend 1000 hours studying, and you will become a Bitcoin extremist. You will realize that this is not just a technology, but a moral justice. Bitcoin brings freedom, economic and property rights to 8 billion people, while also providing 4 million companies around the world the opportunity to invest funds into non-toxic assets."

Will the dispute between Meme and "venture capital coins" continue, and what is the remedy to resolve the dilemma?

The series of controversies surrounding "venture capital coins" has been an important topic that cannot be avoided over the past year. A partner from a certain institution proposed a novel perspective and viewpoint, stating that once the scale of primary market venture capital funds exceeds 30-50 million dollars, it becomes difficult for limited partners to achieve excess returns. This partner believes that only with a sufficiently refined scale can venture capital be compelled to delve into the early stages, truly supporting those entrepreneurs in urgent need of assistance, thereby nurturing real "myths." In contrast, those large-scale venture capital funds often fall into the trap of expanding management scale, participating in later rounds, and launching the market-criticized "venture capital coins." This practice is actually an old problem of Web2 venture capital, and over the past few years, Web3 venture capital has not been spared either.

"I believe this situation will gradually be corrected. Whether it is technological or financial innovation, there will always be a phase of non-consensus, and this is precisely when venture capital should step in. The market will ultimately reward those venture capitalists who dare to act during times of non-consensus," the partner added.

What is the essence of the competition between Meme and venture capital coins? A certain co-founder of a venture capital firm pointed out that it ultimately comes down to the competition between market liquidity and available funds. In an environment where new capital is limited, venture capital coins struggle to sustain market funds due to their low circulation and high FDV characteristics, as well as the continuous emergence of new venture capital coin projects, significantly reducing retail investors' willingness to take over. The advantage of Meme coins lies in their full circulation and fair distribution mechanism, which aligns with the psychology of market investors, becoming a "new weapon" for retail investors to counter the advantages of institutions.

However, the PVP) competition among players of Meme coins is essentially unsustainable, as most Meme coins struggle to have long-term value support, except for a few top Meme projects. The co-founder stated that from the overall landscape of the crypto market, aside from BTC and ETH, and a very small number of DeFi infrastructure projects with stable income sources, the tokens of most other projects are PVP, with market participants competing against each other, sharing wins and losses. Regarding the current predicament of venture capital coins, he believes there is no good solution in the short term. Against the backdrop of tight market liquidity and the increasing advantages of institutional investment, alleviating the issues of venture capital coins will require going through a complete bull-bear cycle to allow the market to naturally clear and rebuild trust and fairness.

"Issuing tokens is not the end, but rather the true starting point for a project's operation." A certain investment manager believes that project teams should not approach their projects with the mindset of "financing equals profit, and issuing tokens equals delivery." Instead, they need to seriously consider whether they can truly have practical application scenarios, whether they can maintain more stable cash flow income, and whether the project can still have active users and a real community after the token issuance.

The head of investment at a certain organization admitted, "Venture capital coin projects" need to think better about Token Market Fit, whether there is a necessity to launch the token, what its use is, what kind of tokens the community will pay for, and how to involve a broader community to diversify holdings and strengthen interest binding.

Which ecosystems, tracks, projects, or standout performances will become tomorrow's stars in the industry?

As the crypto market rises, new narratives of innovation such as AI and DeSci are driving the industry towards a new stage of development. After enduring the baptism of market cycles, leading ecosystems continue to strengthen their moats, while emerging tracks and projects are quietly rising, accumulating strength for future explosions. Looking ahead to the next year, which ecosystems, tracks, and projects are expected to stand out and become the "rising stars" leading the industry? Numerous institutions have provided unique insights.

A partner at a certain institution believes that many people do not fully understand the essence of RWA( Real World Asset ). "We believe that the essence of RWA is essentially one thing: to allow blockchain to account for global mainstream financial assets," he stated. Currently, the penetration rate of this "on-chain accounting" is less than 0.1%. Even if the penetration rate only increases by an order of magnitude, it could give rise to multiple secondary assets similar to ONDO and USUAL.

A head of investment at a certain institution stated that re-staking, as the main narrative for 2024, has not yet been reflected in the coin prices. With the gradual launch of AVS, it may peak in 2025; in addition, ZK projects (RiscZero and hardware acceleration Ingonyama, along with ), will gradually showcase their market potential.

"AI Agent is expected to become the rising star of the crypto industry." A research analyst stated that AI Agent has the ability to process vast amounts of market data, enabling it to make precise trading decisions in real-time, with a reaction speed far surpassing that of traditional human traders; in the DeFi space, AI Agent can optimize lending rates and the pricing mechanism of liquidity pools, significantly enhancing the efficiency of fund utilization; furthermore, it also paves the way for the intelligent management of crypto assets.