Crypto VCs Are Bullish on DePIN and RWA: HashKey Partner

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Venture capital firms are still keen on cryptocurrency and blockchain startups in 2025, but they’re being more picky about where they put their money. They want to see real-world uses that can connect Web2 and Web3.

Xiao Xiao, a partner at HashKey Capital, told CryptoMoon that his company is focusing on sectors like DeFi, gaming, stablecoins, and artificial intelligence. But they’re especially excited about things that can connect Web2 with Web3, like DePIN and RWA tokenization.

DePIN projects, which use blockchains to connect the physical and digital worlds, have a market cap of almost $20 billion, according to DePINscan. In 2024, they raised more than $350 million across pre-seed, seed, and Series A funding rounds, according to Messari.

RWAs, or real-world assets on the blockchain, have reached $17.1 billion in cumulative value, according to RWA.xyz. Private credit and US Treasury debt are the biggest uses for financial tokenization so far.

HashKey’s fundraising process has been smooth, as “investors are generally bullish on crypto in the current economic environment,” Xiao said. But “the more challenging function is choosing which projects to deploy capital to.”

Xiao expects higher VC deal activity in 2025, a view shared by PitchBook, which expects crypto funding deals to reach $18 billion this year from $13.6 billion in 2024.

One of the biggest shifts from 2024 is the “growing preference for consumer-facing projects over infrastructure-focused ones,” Xiao said, adding: “This shift indicates a maturing market where early-stage teams can now build applications more efficiently, leveraging established infrastructure and AI advancements.”

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2025-02-11 20:11