Venture Capital Funding for Crypto Set to Climb, Yet Likely Below All-Time Records: JPMorgan

Crypto Venture Capital Funding Set to Recover in 2025, Challenges Remain: JPMorgan

Crypto venture capital (VC) funding is expected to see a rebound in 2025, with more clarity in regulations and a pro-crypto stance under President Donald Trump’s administration, according to a report from JPMorgan (JPM) released on Wednesday.

The report highlighted that the past few years have been challenging for crypto VCs, mainly due to regulatory uncertainty and enforcement actions from the U.S. Securities and Exchange Commission (SEC) under the previous administration. However, with the introduction of more crypto-friendly policies and the start of the European Union’s Markets in Crypto Assets (MiCA) regulation in December, the outlook for VC funding has improved.

While the resurgence of venture funding is expected, JPMorgan indicated that it will likely not reach the peaks of 2021 and 2022 due to increasing competition from traditional financial institutions. Companies like BlackRock (BLK) and Franklin Templeton are ramping up their involvement in the crypto space, taking a bigger share in sectors such as decentralized finance (DeFi), tokenization, and stablecoins, areas traditionally dominated by VCs.

The report also pointed out that many new crypto projects are now turning to community-driven fundraising platforms instead of large-scale VC token sales. This shift could result in fewer opportunities for VCs to participate in early-stage investments.

Additionally, the rise of cryptocurrency exchange-traded funds (ETFs) has attracted a significant amount of institutional capital, further diverting attention away from traditional venture capital investments in the crypto space.

Despite these headwinds, JPMorgan remains optimistic that as regulatory frameworks stabilize and institutional interest continues to grow, crypto VC funding will recover, albeit at a slower pace compared to the previous highs.