- Venture capital investing in crypto is surging.
- VCs want apps that address crypto's chronic UX.
- Hyperliquid inspires push into trading platforms.
Crypto’s next venture capital boom is looking a lot different from its last one four years ago.
Instead of mammoth investments into NFT platforms and web3 gaming studios, VCs are searching for startups in a raft of new fields.
Venture capitalists on the sidelines of DappCon, a three-day industry event that is part of Berlin Blockchain Week, said they’re zeroing in on AI, trading platforms, and consumer-friendly, crypto-powered apps.
And 2025 is shaping up to be a blockbuster year for VC investing.
So far, venture capital firms worldwide have invested more than $9 billion in crypto startups, according to data from DefiLlama. That’s just $500 million short of all of 2024 with half the year still to go.
Crypto, not PayPal
How crypto will work with AI agents was a hot topic in Berlin.
VCs are looking for startups that can use blockchain-based tokens to help AI agents, or autonomous bots, perform tasks ranging from the mundane — buying groceries — to the important, such as managing retirement accounts.
“We totally see that there’s an emergence of AI agents acting autonomously,” Stefan George, the co-founder and chief technology officer of the blockchain infrastructure provider Gnosis, told DL News.
Last year, George and his team launched GnosisVC with $40 million to back crypto projects.
“They’re not going to use PayPal to pay each other. They’re going to use crypto to pay each other.”
‘Viral loop’
The cross-pollination of crypto and AI is also a big theme with Jakub Rusiecki, a research analyst at venture capital firm 1kx.
His fund also wants to back teams that can solve one of crypto’s most chronic problems — poor user experience, or UX.
Fraught with clunky token approvals and nerve-wracking key management, crypto platforms still intimidate many newcomers.
‘People are competing on who has a better profit-and-loss. We’re gonna lean into that.’
— Jakub Rusiecki
The poor UX may be hindering the adoption of blockchain-based apps at a time when the likes of TikTok are raising expectations among consumers.
“Every successful social consumer app had a viral loop that got people stuck on the app,” he said. “What do blockchains actually enable, and what is the new potential for consumer behaviour?”
Hyperliquid surges
With buzz mounting about tokenised stocks and Bitcoin hitting all-time highs, VCs are also keen on innovative crypto trading platforms such as Hyperliquid, the decentralised derivatives exchange.
Felix Machart, a partner at Greenfield Capital, told DL News that an uptick in trading activity on decentralised derivatives exchanges is also drawing the attention of investors.
With trading speeds that compete with centralised exchanges, Hyperliquid has rapidly attracted DeFi traders to its platform since its token launch eight months ago.
Its TVL, or deposits invested in the protocol, has jumped 33% this year, to $536 million, according to DefiLlama data.
And its token, $HYPE, has soared 53% in the last 30 days thanks largely to an automated buyback programme.
It also helps that it’s not a drag to use.
“There’s a lot of cool things happening around apps that try to turn trading into a very consumer-friendly and social experience,” Rusiecki said.
Gamefied trading
Rusiecki also pointed to trading apps that enable competition among traders and transform the volatile experience of trading cryptocurrencies into a more game-like experience.
“There are leaderboards. People are competing on who has a better profit-and-loss. We’re gonna lean into that.”
The other big plus in this new wave of trading apps is, ironically enough, the ability to use traditional metrics such as revenue to analyse transparent crypto platforms.
And, hopefully, more reasonable valuations.
“More transparency should actually lead to more efficient pricing of assets,” Machart told DL News.
Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.
