The crypto market has entered the fifth month of 2025, yet retail investors have not seen much improvement in their portfolios. Meanwhile, what directions are venture capital (VC) firms taking amid the 2025 market landscape?
The answer to this question could serve as valuable insight for individual investors.
What Sectors are Attracting VC Attention for the Remainder of 2025?
Andy, the host of The Rollup Co., shared key highlights from his conversations with top venture capitalists. These insights reveal the sectors that are drawing strong interest.
According to Andy, the first area of focus is stablecoins.
“Stablecoin issuers are very investable & will likely 10x in quantity,” Andy revealed.
CoinMarketCap lists over 200 stablecoins, while CoinGecko tracks more than 300. Data from Token Terminal shows that the stablecoin market cap has surpassed $225 billion, issued by over 50 entities. However, Tether and Circle still dominate most of that market cap.
Stablecoin Capitalization by Issuer. Source: Token Terminal
If this prediction holds, the number of stablecoin issuers could increase by hundreds. This would open new investment opportunities for individuals through airdrops, stablecoin yields, and DeFi protocols.
VCs also find AI an interesting sector. However, they recognize a gap in how AI applications are developed in Web2 versus Web3.
“The AI sector is interesting but better builders in Web2, for now,” Andy added.
Recent reports from BeInCrypto show that the number of AI agents is growing at an average monthly rate of 33%. Yet, Web3-based AI solutions account for just 3% of the total AI agent ecosystem. These figures align with VCs’ observations. Web3 AI may need more time to prove itself with practical and efficient use cases.
Anthony, founder of blockchain121, also commented on a trend where decentralized AI projects now attract top-tier talent from the Web2 AI space.
“Legit DeAI projects really are, for the first time, attracting legit world-class engineers and researchers from Web2 AI,” Anthony said.
In addition, Andy revealed that VCs have a particularly strong focus on real-world assets (RWAs).
“RWAs, RWAs, RWAs are all that matter,” Andy emphasized.
Total RWA Value. Source: RWA.xyz
BeInCrypto reported that the market cap of RWAs surpassed $20 billion in April. At the time of writing, the RWA.xyz platform shows the current market cap at $18.9 billion.
The involvement of major financial institutions like BlackRock and Fidelity has boosted investor confidence in the sector’s long-term potential. Tren.finance even predicts that RWA market capitalization could reach over $10 trillion by 2030.
Finally, in addition to stablecoins and RWAs, Andy mentioned that Bitcoin liquidity markets are also of interest to VCs.
VCs Suffer Losses in 2025 Amid Market Decline
As the market cap has dropped significantly, VCs haven’t been immune to losses in 2025. Unpredictable macroeconomic policies like tariffs have added pressure, triggering a harsh shakeout.
“Crypto VCs are getting their margins squeezed as of recent. Many will not return their LPs positive returns. Others are having trouble raising new funds, especially in the post-tariff world. A lot of the tokens they invested into over the last two years haven’t launched or are beaten down badly. OTC markets are much drier than before. There will be an exodus at some point. The strong will survive,” Andy disclosed.
According to CryptoRank, crypto VC funding reached $4.8 billion in Q1 2025—the highest since Q3 2022. This was largely driven by major deals such as MGX and Kraken. In April alone, VC funding hit $2.3 billion across 87 investment rounds.
Overall, VCs remain cautiously optimistic despite the pressure from investor withdrawals and macroeconomic headwinds since early 2025. This optimism is reflected in the increase in funding volume and deal flow compared to 2023–2024.
