EXCLUSIVE: What VC Firms Expect From Crypto Projects This Year With Foresight Ventures

2024 was a big year for cryptocurrency – spot Bitcoin exchange-traded funds (ETFs), BTC topping $108,000, Ethereum ETFs, the unprecedented rise of the memecoin segment, the convergence of cryptocurrency and artificial intelligence, and several other blockchain highlights.

The massive developments around crypto helped get more interest from investors and venture capital firms. A recent blockchain analytics firm showed that most of the investments in blockchain and crypto in 2024 were in AI, DeFi, LSDfi, DePIN, and decentralized exchanges.

This year, some of the investments may shift, but some segments are expected to only see more cash flowing in due to proven growth in 2024.

In an exclusive with International Business Times, Min Xue, an investment partner at rising crypto investment and incubation firm Foresight Ventures, delved into what venture capital firms and investors are looking for in blockchain and crypto projects this year.

The 'Trump Effect' on Crypto Investments

Investments were already present across various segments of the broader blockchain space last year, but U.S. President Donald Trump's win in November helped drive more attention to the space, especially as he promised to "make crypto great again" by putting the U.S. in the lead.

For Min, Trump's second presidency did "take the crypto space by storm," but she believes there will still be a cautious tone among VC firms, especially around memecoins, even if Trump launched his own meme token.

"The vast majority of meme coin projects are speculative, without any real utility. So, VC firms will likely be highly cautious about investing in this segment, unless projects with more utility and use cases enter the market," she projected.

On the other hand, she does expect certain projects to gain more attention under Trump, particularly those based in the United States.

• Stablecoins – Trump's crypto-centric executive order signed last month was very clear on its demands for regulatory clarity, including on stablecoins. Min noted that the U.S. president's EO could signal a potential shift toward more structured frameworks for stablecoin adoption, especially for U.S.-based stablecoin issuers.
• PayFi – Payment finance (PayFi), a broad term that refers to the convergence of decentralized finance (DeFi) and payments through blockchain technology, is expected to also see investment focus this year. "As adoption accelerates, we believe stablecoins and PayFi solutions could serve as crucial entry points for mass adoption of blockchain technology," Min said.
• Tokenized real-world assets (RWAs) – The entry of institutional adoption into blockchain last year fueled demand for tokenized bonds, treasuries and alternative assets. Following BlackRock's BUIDL fund launch, there have been strong signals that other major institutions are interested in RWAs. "Naturally, VC investment is likely to follow suit," Min predicted.

What's Affecting VC Interest Aside from Trump's Impact

Trump has had a significant impact on investment interest as he opened the floodgates through his embrace of blockchain and crypto. On the other hand, other factors have had their role in renewed interest in the sector.

Min noted how macroeconomics will still play a huge role this year. "Even if the Fed doesn't cut rates and with 2025 still being an inflationary year, Bitcoin as a deflationary asset will still have its increasing value," she said.

There's also the apparent adoption among traditional financial institutions. In particular, Bitcoin ETFs brought in mainstream investors, and now, the focus is shifting to stablecoins, tokenization, and DeFi-TradFi integration, Min said.

The promise of regulatory clarity is also drawing in more curious eyes. Regulatory clarity is a critical aspect for investors, and with expectations high for better and clearer regulations, investments are expected to pour in 2025.

Finally, the record amount of liquidity now entering the crypto space will "ultimately fuel the Bitcoin narrative and increase its dominance," Min said.

"I see Bitcoin hitting $200,000 by the end of this year, and the altcoin market will eventually follow, just that the lasting period and the narrative would be highly uncertain and changing really fast," she predicted.

What Exactly Are Venture Capital Firms Looking For?

Retail investors have different takes on what makes a crypto or blockchain project suitable for investment. However, VC firms have a more targeted set of factors for assessing projects.

"VC firms are largely interested in any project that unlocks new use cases and brings fresh capital into the market. They are generally looking for projects that solve real problems with scalable solutions," Min pointed out.

She went on to note that VC firms are interested in projects that go "beyond the speculative drive" and have apparently larger, sustainable life cycles since it's critical to reduce investor risks.

• Strong team – This is a major factor for VC firms, Min explained. A strong team is comprised of founders who have deep technical expertise and have a clear vision toward their goal. Last but not least, strong teams have founders who have the "ability to execute even in unpredictable market conditions," given how unpredictable crypto prices can be.
• Beyond a niche – Min noted that VC firms want to be involved in projects "that can scale beyond niche crypto users," which is why firms like Foresight Ventures often circle back to segments such as AI-driven automation and tokenized assets, as these sectors have clear demand both in the retail and institutional realms.
• Technical differentiation – Producing the same product such as another DeFi protocol or a Layer 2 without technical differentiation "may not be enough in 2025," Min argued. For one, there are many projects popping up in the blockchain space with the same provisions. "VCs are looking for projects with a unique value proposition. For example, niche blockchain segments, like parallelized execution and modular frameworks – these will likely receive more attention," she said.

What Blockchain Projects Can Do to Attract More VC Investors in 2025

In 2024, many projects rose to the spotlight then crashed to the ground because hype and narrative led the way ahead of launch. "Hype, or narrative alone isn't enough anymore, since the marketing attention is shifting fast. Teams need to demonstrate product-market fit, solid business models or tokenomics, and defensible moats," Min reiterated.

So, what should crypto projects focus on to get VC interest this year?

• Building around high-growth sectors – Not all projects will shine this year, but most industry experts and analysts have projected that AI-powered blockchain applications, tokenized RWAs, and stablecoin-driven payments will lead the way in 2025. To get noticed for investment, projects in the said segments should "showcase how they solve real problems, rather than simply iterate on past cycles," Min said.
• Regulatory alignment – Following the struggles of some crypto firms with the U.S. Securities and Exchange Commission (SEC), VCs and investors have become more cautious of projects that may not be aligned with regulations. "VCs prefer to back projects that are structured to withstand regulatory scrutiny. Firms that prioritize compliance, transparency and institutional-grade infrastructure will have an edge this year," Min projected.
• Top-notch experience – Web3 adoption remains limited, even if interest is growing. VCs recognize the potential of blockchain, but with adoption still in the early stages, projects are expected to focus on delivering the best experience to users. "Projects that design frictionless experiences—embedded wallets, gasless transactions and seamless fiat onramps—will stand out," she said.

Min also noted the importance of working on projects that can be sustainable in the long-term. "Token incentives should be used strategically, not as a short-term growth hack. Crypto firms need to prove they can generate sustainable value, not temporary liquidity," she advised.

Notably, Foresight Ventures has been ranked as one of the top investors in blockchain projects last year, alongside Animoca Brands and other investment greats.

The Role of Foresight Ventures in Blockchain Evolution

In CryptoRank's Crypto Fundraising Analytics Dashboard, Foresight Ventures is the 7^thof 14 ranked VC firms that have been most active in the last 12 months as of Monday. It has also consistently retained its place within the Top 10 of other rankings around major blockchain investors.

Min noted that Foresight Ventures made more than 60 investment rounds, with 5 as the lead investors. "We don't just deploy capital, but we help build ecosystems that drive adoption and create long-term value," she said.

Beyond its investments, Foresight Ventures, which has offices in New York and Singapore, also supports founders with "deep strategic insights, network access, and product-market fit guidance."

In a nutshell, the VC firm is actively helping push the crypto industry toward mainstream adoption while ensuring that capital flows into the most promising and high-impact projects the industry has ever seen.