Top Crypto VCs' 2024 Outlook: Broadly Bullish on Next Year's Market, Bull Run May Unfold Fully
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Top Crypto VCs' 2024 Outlook: Broadly Bullish on Next Year's Market, Bull Run May Unfold Fully
"The bull market will fully unfold in 2024," but it's uncertain how long it might last.
Navigating Web3 tides with focused insightsText: Yogita Khatri
Translation: TechFlow
As 2023 draws to a close, top-tier cryptocurrency venture capital firms are expressing optimism toward 2024. Firms such as Coinbase Ventures, Galaxy Ventures, Polygon Ventures, and Multicoin Capital have not only continued investing through tough times but are also hopeful about the year ahead.
Summary
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In 2023, crypto funding dropped 68% year-on-year to $10.6 billion.
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Nevertheless, leading crypto VCs generally expect favorable market conditions in 2024.
The crypto funding landscape faced significant challenges in 2023, with total investment plunging 68% to just $10.6 billion—sharply down from $33.2 billion in 2022 and marking the lowest level since 2020.
Multiple factors contributed to this decline, including historically high interest rates, the rapid rise of artificial intelligence diverting attention from crypto, increased regulatory scrutiny, and the collapses of prominent crypto firms like FTX, Celsius, and BlockFi.
So, what does the outlook for crypto funding look like in 2024? The Block reached out to 20 of the most active crypto venture capital firms in history—and they’re broadly optimistic.
Coinbase Ventures: A Bright 2024
Coinbase’s venture arm has continued investing throughout the difficult year of 2023 and is “increasingly optimistic” about the future.
Coinbase Ventures expects to remain highly active in 2024 and identifies four key drivers that will support market growth next year:
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Improved regulatory clarity (especially outside the U.S.)
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Maturation of protocol infrastructure
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Increased institutional participation
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Innovation in how users interact with on-chain products
Coinbase Ventures will continue backing areas that accelerate bringing the next billion users on-chain—including crypto infrastructure and consumer-facing applications like social and gaming—and sees opportunities at the intersection of AI and crypto.
The firm will also seek to expand its support for teams building on Base through the Base Ecosystem Fund.
Galaxy Ventures: Challenging and Calm Market Conditions
Galaxy’s venture arm, led by billionaire investor Mike Novogratz, remains vigilant but committed to early-stage investments.
Mike Giampapa, general partner at Galaxy Ventures, said: “We expect the crypto VC environment to remain challenging. Even successful companies and startups may have to raise funds at flat or down rounds.”
Giampapa noted that limited partners “remain overly exposed to illiquid investments,” making new capital entering the venture space “more constrained,” and fundraising conditions likely to stay subdued as long as interest rates remain elevated. However, he anticipates more consolidation in the industry, with larger firms potentially acquiring smaller ones.
Meanwhile, startups with sustainable business models and proven product-market fit—such as blockspace and stablecoins—are expected to attract more investment in 2024.
“Blockspace is a fascinating and relatively new product that already shows signs of market fit,” Giampapa said. “When seller-side blockspace develops network effects, consumers are willing to pay higher fees per transaction due to the convergence of apps, developer talent, capital, and users.”
He added that in the case of stablecoins, the market’s shift toward on-chain assetization is only “the tip of the iceberg” in the long term.
“We see numerous opportunities for new asset classes to be brought on-chain, B2B and B2C applications embedding these new financial products into their existing offerings, and a wave of new infrastructure players emerging to empower developers to drive adoption,” Giampapa said.
Animoca Brands: Very Optimistic
Hong Kong-based Animoca Brands is highly optimistic and expects a significant improvement in crypto funding conditions in 2024.
The company’s co-founder and executive chairman, Yat Siu, said momentum has shifted with the rebound in crypto markets, possibly signaling the beginning of a new bull cycle.
According to Siu, games with Web3 components and AI-integrated gaming are likely to attract more investment in 2024. “Web3 gaming is poised for acceleration, especially in Asia and the Middle East, while Europe is also showing strong interest. Meanwhile, AI in gaming will create more engaging and responsive experiences—for example, adding complexity and depth to non-player characters, and enhancing content creation and asset generation.”
Shima Capital: Crypto Is Still Early
Early-stage investor Shima Capital is “cautiously optimistic” about crypto funding in 2024. Alex Wettermann, head of gaming at the firm, expects increased investment next year in infrastructure, gaming, and tokenization.
“We remain very active in this space—working closely with portfolio companies, diving deep, and engaging with new startups,” Wettermann said. “This is business as usual for us because we firmly believe in an increasingly digital, gamified, and tokenized world. We’re still in the early stages of crypto.”
HashKey Capital: Positive Outlook
Asia-based crypto venture firm HashKey Capital expects next year to be a bullish market.
An investment partner at HashKey Capital said the firm will actively pursue new investment opportunities, including liquid investments. It also plans to expand its asset management operations into new markets and launch a series of funds tailored to different investor preferences.
Multicoin Capital: Huge Opportunities for Crypto in AI
Kyle Samani and Tushar Jain, managing partners at Multicoin Capital, are bullish on 2024—particularly on the Solana ecosystem given recent developments. Samani also sees major opportunities for crypto within the AI revolution. “There’s currently a massive GPU shortage, and competition for these resources will grow exponentially,” he added, noting that crypto-powered computing markets and specialized cloud providers could step in to fill the gap.
Samani said: “Token-incentivized reinforcement learning products represent another huge opportunity. Models need humans to impart knowledge. Crypto networks are excellent tools for organizing and incentivizing people around the world to contribute to shared models.”
As for Jain, he expects “a whole new generation of banks, DeFi narratives, payment apps, on- and off-ramps, and DEXs (decentralized exchanges)” to emerge by 2024, filling the void left by centralized lending desks and exchanges cleared out in 2023. “These products will far surpass previous-generation DeFi projects and match the user experience of custodial providers,” he said.
Polygon Ventures: Bullish on Web3 Innovation and Adoption
Abhishek Saxena, lead at Polygon Ventures, said the bottom for Web3 funding has likely been reached, suggesting increased investment in the new year. “Despite the bear market, the resilience we’ve seen in developer activity is a positive signal, highlighting ongoing foundational development,” Saxena said.
He expects funding for consumer-facing use cases—including social, financial services, and entertainment—to pick up again, potentially giving rise to new category leaders in these fields. Tokenization verticals should also attract stronger institutional investment in the coming year. “So while 2023 was about building behind the scenes, I’m optimistic that innovation and adoption in Web3 will accelerate once again in 2024,” Saxena said.
NGC Ventures: Bull Market Will Fully Unfold
Three general partners at Asia-based NGC Ventures are optimistic about the crypto market and venture investment in 2024.
Roger Lim of NGC said his focus lies in verticals such as the convergence of AI and crypto, Bitcoin Layer 2 networks, modularity, and zero-knowledge technologies.
Wayne Zhu of the firm is focused on “intent-based protocols,” which have the potential to enhance user experience, manage gas fees and slippage more efficiently, and improve composability to attract more users.
Meanwhile, Tony Gu of NGC highlighted two areas: decentralized physical infrastructure networks (DePIN) and decentralized science (DeSci). He said: “DePIN, as a consumer-facing application layer, has the potential to drive mass adoption. In DeSci, we’ve already seen some interesting DAOs emerge, but one underexplored area is decentralized funding for open-source projects. I believe there’s great potential there, especially when combined with AI—for instance, using decentralized machine learning models.”
Overall, NGC Ventures expects “the bull market to fully unfold in 2024,” though it remains uncertain how long it might last.
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