Crypto and blockchain-focused venture capital is unfazed by recent market volatility and is using the opportunity to uncover hidden gems in an industry that’s only “one decade into a 30-year paradigm shift,” according to Hoolie Tejwani, the head of VC firm Coinbase Ventures. 

Coinbase Ventures will “continue to invest steadily through market conditions” because it sees the “big picture,” Tejwani told Cointelegraph in an interview.

“What we’re seeing as investors is an exponential technology change curve that is transforming the way people interact, how value flows, and how economies are run. And it’s being shaped by the people who are building on crypto infrastructure,” said Tejwani.

Coinbase Ventures’ portfolio of investments includes Arbitrum, Dune, EigenLayer, Etherscan, OpenSea, Optimism and Uniswap, among others. Its mandate is to invest in project founders who share the namesake crypto exchange’s vision of creating more economic freedom through blockchain and Web3 applications.

The company is especially “bullish on stablecoins,” thanks in part to recent crypto-friendly moves in the US Congress and by President Donald Trump, Tejwani said. 

The Senate Banking Committee forwarding a bill to regulate [stablecoins] “is a huge step for crypto,” he said, referring to the GENIUS Act, which stands for Guiding and Establishing National Innovation for US Stablecoins.

The GENIUS Act is on its way to the full Senate after clearing the banking committee in an 18-6 vote. Source: Bill Hagerty

Although there was some partisan opposition, California Representative Ro Khanna recently said at least 70 of his fellow Democrats now understand the importance of stablecoins in maintaining the US dollar’s role as a global reserve currency. 

Khanna, like others, expects stablecoin legislation to cross the finish line this year.

The dollar-denominated stablecoin market now exceeds $220 billion, representing roughly 1.1% of the US M2 money supply. Source: RWA.xyz

Related: US stablecoin bill likely in ‘next 2 months’ — Trump’s crypto council head

DeFi, consumer applications remain in focus

In addition to stablecoins, Tejwani identified “next-generation” decentralized finance (DeFi) protocols, onchain consumer applications across social, gaming and creator markets, and intersection points between crypto and AI as major investment themes in 2025.

Some of these themes were also identified by Jeffrey Hu, the head of investment research at Hong Kong-based HashKey Capital, although HashKey is placing a bigger emphasis on tokenizing real-world assets and decentralized physical infrastructure networks, also known as DePINs. 

Nevertheless, Tejwani and Hu agree that institutional adoption and real-world use cases represent the major focus areas for venture capital firms. 

“We expect 2025 to be a banner year for crypto startup activity and VC investment, fueled by clearer regulations, institutional adoption, and the continued growth of real-world use cases,” said Tejwani.

Business service providers, DeFi, security services and payments attracted the largest VC capital in February. Source: The TIE

Tejwani’s outlook on 2025 is consistent with recent inflows into crypto-based startups. As Cointelegraph reported, crypto and blockchain projects received a combined $1.1 billion in funding in February alone.

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