HodlX Guest Post Submit Your Post 2024 will be recognized as the year when crypto and blockchain finally mainstreamed their legitimacy. While the crypto industry is no stranger to adversity, this year has seen a surge of optimism regarding its potential. With the re-election of Donald Trump as President of the United States, the global cryptocurrency market has surpassed a valuation of $3 trillion for the first time in over three years. This resurgence is driven by a demand for Bitcoin and other digital assets, coinciding with the new administration’s policies and market sentiment. With the clouds starting to part, regulatory clarity and infrastructural progress have emerged as two key factors driving the industry’s successes and hard-earned legitimacy. This shift has fueled a steady influx of VC (venture capital) investments over the course of 2024, signaling the market is both maturing and preparing for a major breakout. So, how can startups take advantage of 2025’s fresh possibilities to garner VC attention? The answer lies in reflecting on the past year. Gains of 2024 This year welcomed a new level of maturity for the crypto sector, with some of the most successful projects prioritizing security, compliance and building trust with investors and the broader Web 3.0 community. Just two weeks into the year, the approval of spot Bitcoin ETFs supercharged market confidence, attracting institutional and retail investors. But why? The move legitimized Bitcoin in the eyes of skeptics, fueling interest in crypto to the general public and driving gradual price gains. By making Bitcoin more accessible through traditional financial markets, the approval opened the gates for larger institutional investments , which had previously been cautious about direct exposure to the crypto market. And now, Trump’s re-election has produced a market surge, with Bitcoin prices reaching a historic high, surging over 129% in 2024. While the specifics of Trump’s crypto policy remain uncertain, he is widely anticipated to be a strong ally to the industry, fueling optimism for what lies ahead. One of the most welcomed developments over the last 12 months has been the convergence between crypto and AI . While it was always clear that these two transformative technologies would eventually intersect, few could have predicted the speed and scale at which they merged – a nd the surface of what’s possible is only just being scratched. While there is no crystal ball to predict exactly what’s coming next year, startups can use 2024 as a compass, pinpointing which trends will be on VCs radar. Solving scalability through infrastructure For startups looking to scale successfully, one of the most critical areas to address is the infrastructure sector, particularly in the ongoing development and scaling of Ethereum’s ecosystem. As Ethereum continues to grow rapidly, scalability remains a major barrier, making it a key focus for VCs looking to invest in solutions that can handle high-volume transactions efficiently. Layer-two solutions are becoming increasingly essential in addressing the challenges facing Ethereum , and VCs are keen to support startups in developing the infrastructure needed to enhance the network’s efficiency, security and accessibility. Pioneering privacy solutions with AI and blockchain In 2025, AI and blockchain are set to significantly advance data privacy, addressing concerns highlighted by copyright lawsuits involving several high-profile companies . Innovations such as FHE (fully homomorphic encryption) and federated learning are set to pave the way for privacy-preserving AI training. Startups combining AI and blockchain to safeguard privacy while creating value for users are positioned to attract investor attention. In particular, solutions that allow individuals to maintain control over their data and be compensated for its use could disrupt traditional data-sharing models, creating new business opportunities. Beyond privacy, there are clear challenges in AI that Web 3.0 could help address, including improving accessibility and democratization, creating pathways for monetization and ownership and fostering incentives for open contributions. While the future remains uncertain, the growth of consumer adoption and institutional investment is likely to strengthen the foundations of the crypto industry and drive sustainable progress. In the coming year, we expect VCs to deepen their commitments, focusing on building long-term value while supporting talented founders whose solutions will drive the next wave of innovation. The rise of PayFi While DeFi has made steady progress, its full integration into traditional financial systems is still unfolding. Interest in DeFi is on the rise, and in 2025, the focus will shift towards PayFi (payment finance). First introduced last July, PayFi leverages blockchain as a settlement layer, using Web 3.0 payments and DeFi protocols to create more transparent, cost-effective and efficient financial transactions. For VCs, investing in PayFi startups presents an opportunity to be involved in the next wave of financial innovation, which is set to reshape the relationship between crypto and TradFi (traditional finance). Increasing focus on real-world assets for investment opportunities Tokenized RWAs (real-world assets) are quickly becoming a popular investment. By 2030, the market for tokenized RWAs is projected to reach $16 trillion , as companies are looking to bring more traditional asset classes onto blockchain platforms. ANZ, one of Australia’s top four banks, recently partnered with Singapore’s Project Guardian to explore tokenizing RWAs, which is an example of an institution looking to expand access to a wider range of asset classes. VCs should look out for projects innovating in this space, as tokenized RWAs allow even those with limited capital to participate in substantial ventures, opening opportunities for financial growth and stability, Bringing stablecoins and TradFi together As blockchain continues to align with TradFi, the stablecoin market will be a pivotal sector to watch. VCs should be keenly interested in the growing stablecoin market, particularly as major players recently announced new initiatives that will allow banks to issue stablecoins and other fiat-backed tokens internationally. Stablecoins, alongside payments and yield protocols, are expected to play a central role in the continued Web 3.0 expansion by providing stable, scalable and interoperable solutions for DeFi applications. They help to ensure seamless value transfer, which has the potential to help foster greater adoption across markets globally. As new projects enter the DeFi playing field, VCs will continue to intensify their investments, prioritizing the creation of long-term value and continue backing founders whose solutions are set to fuel and lead the next wave of progress in the blockchain and Web 3.0 ecosystem. James Wo is the founder and CEO of DFG . He is a seasoned entrepreneur and crypto space investor, establishing DFG in 2015. He currently manages a portfolio exceeding $1 billion in assets. With a track record as an early investor, James has supported companies such as Circle, Ledger, Coinlist, Render Network and ZetaChain. 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