"Killer Application" in the world of cryptocurrencies.🎯
Despite the tensions caused by the U.S. trade war, which led to a drop in many liquid tokens, VCs maintained their focus on the fundamental value of cryptocurrencies, especially stablecoins.
The favorable outlook of VCs towards stablecoins has been on the rise. Although the U.S. trade war caused a decline in the earnings of most liquid tokens in the last quarter, VCs remained interested in the main uses of crypto. This interest is reflected in the growth of the market capitalization of stablecoins, which increased by 25 billion, reaching a total of 227.1 billion, despite token prices declining.
According to the latest Pitchbook report on VC trends in cryptocurrencies, the different trajectories of the stablecoin market show the growing positive perception of VCs towards them. "The use of dollars for settlement remains the most prominent application in crypto, at least in part, independent of broader risk changes. Our forecasts suggest that VC funding could increase significantly in the short term, especially in startups involved in payments, remittances, and treasury management that directly leverage the speed offered by stablecoins," indicated the Pitchbook team in their report.
Despite the cryptocurrency market recovering much of the losses suffered during the first months of the second quarter, the Pitchbook team believes that VCs will engage even more if the industry addresses the security concerns that intensified after the Bybit hack. They also predict that an increasing number of institutional investors will demand tools to verify reserves in real-time and middleware that simplifies key management. Startups that solve these challenges are likely to attract investments, they added.
Meanwhile, the report highlights that the interest of small investors has decreased in the quarter, resulting in a drop in the volumes of memecoins, especially in Solana, and a liquidity shift from SOL to other blockchains in search of better yields. The reduction in retail activity has impacted investment in meme token exchange platforms. Looking ahead, the report mentions that Circle's upcoming initial public offering (IPO) could be a significant milestone for capital in cryptocurrencies, potentially validating the stablecoin model. Furthermore, the success of the IPO could enhance valuations in the realms of payments and cryptocurrency infrastructure.
"In summary, the first quarter of 2025 was characterized by a phase of consolidation rather than capitulation. Although the market beta turned negative, the key signals for VCs—the growth of stablecoins, the decrease of risks in infrastructure, and a credible IPO pipeline—remain in place," stated the team. The Pitchbook team concluded that this combination establishes a framework for a more 'fundamental' implementation environment in the coming months.#SaylorBTCPurchase #BinanceAlpha$1.7MReward #BinanceAlphaPoints #BinancePizza