Which encryption zones are favoured by Trump's election? Here's what a dozen venture capital pros have to say.

Author: Yogita Khatri, The Block; Translated by: Tao Zhu, Jinse Caijing

In the past few days, the crypto world has stirred up a whirlwind. After Donald Trump won the election, the price of Bitcoin broke through the $93,000 mark. Thinking back to 2018 when I first started writing articles about cryptocurrency, it feels crazy to see the price of Bitcoin at only around $3,000. But here we are, witnessing the unfolding of the future.

I spoke with a dozen cryptocurrency venture capital investors, and while the excitement brought by Trump’s victory and Bitcoin’s rise is undeniable, most are sticking to their long-term plans. That said, some are adjusting their approaches, paying closer attention to the new trends and changes in the political and market landscape.

**“I think it’s right for the industry to be euphoric,” said Lasse Clausen, founding partner of 1kx. “You have to be an insider to really understand the scale of the previous government’s destructive innovation. So, now that founders can freely try again, outsiders still underestimate how many exciting products this industry will create.”

Arianna Simpson, a general partner at a16z crypto, agrees with Clausen’s point of view and notes that “the past few years have been challenging for the crypto industry.” However, she anticipates that “a significant shift in policy” will greatly benefit web3 builders and companies.

Given the expected clarity of cryptocurrency regulation under the Trump administration, investors anticipate that more founders will begin to venture into the web3 space. Earlier this week, Portal Ventures, founded by former Insight Partners investor Evan Fisher, raised $75 million for its second fund, which manages over $80 billion in assets under management (AUM), and this fund will specifically invest in early-stage cryptocurrency seed startups. Fisher told me he expects that repeat founders who previously sold their businesses and are sitting on hundreds of millions but hesitated to enter the cryptocurrency space due to legal and regulatory risks will now begin to enter the space as the regulatory environment has alleviated those risks. Fisher stated, “We will see high-level founders start to enter the cryptocurrency space more.”

CoinFund founder, managing partner, and CEO Jake Brukhman told me that his company is preparing for what he calls the “super cycle” in the crypto market. Brukhman stated that CoinFund is well-capitalized for seed, venture capital, and liquidity investment projects, and added that the company has hired 6 new employees this year, expanding its investment team, of which 5 joined in the past two to three months.

Bet on cryptocurrencies, artificial intelligence, DeFi, etc.

Looking to the future, cryptocurrency venture capital firms are focusing on high-potential areas such as crypto artificial intelligence, DeFi, tokenization of real-world assets (RWA), infrastructure, stablecoins, and payments.

Many investors see the intersection of cryptocurrency and artificial intelligence as the next transformative trend. Ed Roman, co-founder and managing partner of Hack VC, describes crypto AI as “the most undisputedly sexy category in the crypto space right now,” envisioning a multi-layer web3 AI stack that leverages the cost efficiency of decentralized computing networks. “This is a market worth trillions of dollars when serving web2 clients,” Roman said. “AI is not a fad (like NFTs). AI is creating real business value and may be the most important technological innovation since the smartphone and the internet.”

However, Roman stated that the health of the crypto AI category largely depends on the health of the web2 AI category, which is inspired by NVIDIA. Therefore, Hack VC is closely monitoring NVIDIA as a “loose proxy” for crypto artificial intelligence.

Maven 11 Capital Chief Information Officer and Executive Partner Balder Bomans has also observed the continuous growth of crypto AI startups, particularly favoring AI-driven DePIN protocols that provide computing for AI model training. CoinFund’s Brukhman added that most retail investors looking to engage with artificial intelligence might do so through cryptocurrency next year. “AI coins are scarce, but the demand is high. The summer of 2025 will be the summer of decentralized artificial intelligence (deAI).”

Another focus of investor attention is the revival of DeFi as institutional adoption increases. Roman from Hack VC pointed out that DeFi has recently suffered losses due to high interest rates, making U.S. Treasury bonds more attractive. However, Roman added that the expected interest rate cuts by Trump may make DeFi more competitive compared to traditional financial tools like Treasury bonds. He sees DeFi as a “once-in-a-lifetime opportunity” to simplify finance.

Clausen of 1kx pointed out that TradFi institutions are now likely committed to bringing RWA on-chain and utilizing DeFi infrastructure on a large scale. Clausen said, “Think about how bad trading, clearing, and settlement are in TradFi, whereas decentralized exchange (DEX) offers three-in-one instantaneous trading with no counterparty risk and no publicly verifiable exchange operator fraud.” “It’s like fishing with dynamite; it’s even unfair.”

Nomad Capital Managing Partner and former Binance executive Erick Zhang also believes that DeFi is expected to grow, especially in the context of the resurgence of altcoins and the ongoing challenges faced by centralized exchanges.

Will Nuelle, General Partner at Galaxy Ventures, and Thomas Klocanas, General Partner and Head of Venture Capital at BlockTower Capital, also foresee the expansion of DeFi, RWA tokenization, stablecoins, and payment categories.

“After Trump’s inauguration, it became clear that one of the biggest obstacles to the adoption of stablecoins in the payment sector—the banking relationships interfacing with the fiat system—has become easier,” Nuelle said. “We hope/expect that banks providing legitimate cryptocurrency services will not fear retaliation from the Federal Deposit Insurance Corporation (FDIC) or other agencies, which should alleviate banks’ ability to integrate with the clearly growing use cases.”

Consumer-facing applications and infrastructure categories are also receiving increasing attention. Simpson from a16z crypto stated, “I am particularly excited about the takeoff of consumer applications for cryptocurrency, as this category is especially adversely affected by the upcoming change in government policies.” “We remain very interested in DePIN and ongoing infrastructure projects.”

Borderless Capital partner Alvaro Gracia also emphasized the potential growth in the DeFi and DePIN sectors as Bitcoin’s dominance shifts towards altcoins. Gracia manages a DePIN fund worth $100 million, and she remains particularly optimistic about this category, noting that the fund still has about $70 million available and will be deployed over the next two to three years.

Clausen from 1kx added that infrastructure, middleware, and consumer applications are the key categories for his company, particularly consumer applications that require bank integration, which have previously been hindered by regulatory restrictions.

Adam Winnick, the General Manager of Finality Capital Partners, expressed optimism about the infrastructure vertical industry, emphasizing that restaking and zero-knowledge technology startups are key focus areas. Miko Matsumura, Managing Partner at Gumi Cryptos Capital, stated that he focuses on “middleware” infrastructure projects aimed at addressing “normal people’s normal problems,” rather than solving “crypto people’s crypto problems.”

At the same time, infrastructure is not so exciting for some investors. Boman from Maven 11 pointed out that the company has shifted its focus to application-level investments over the past 12 months, as the rise of robust overall chains and the continuous improvement of modular stacks have eliminated the bottlenecks of large-scale expansion.

Fisher from Portal Ventures stated that his company has been lacking infrastructure projects and instead prefers commercial startups that have clear distribution advantages and strong user demand.

Zhang from Nomad Capital also mentioned that the company is more cautious in its approach to deploying capital in infrastructure projects, particularly first-layer and second-layer networks. “Most infrastructure projects are essentially ‘infrastructure memes’, and their success often depends on the founding team’s ability to effectively manage the narrative and brand,” he said. “However, the number of teams that can excel in this unique dynamic is still limited.”

Risks of the Trump Administration

Despite the new optimism in the cryptocurrency space during Trump’s presidency, several venture capitalists have warned of potential risks that could affect the industry’s development trajectory.

Clausen of 1kx expressed concern over Trump’s immigration policy, believing that a reduction in the labor supply could lead to rising wages, which may be unfavorable for risk assets such as cryptocurrencies.

Nuelle of Galaxy Ventures pointed out that if “Trump becomes too permissive towards the crypto industry,” it may repeat the failures of FTX. He stated that balanced bipartisan legislation and overall clarity regarding the status of digital assets would create the most stable long-term value.

Zhang from Nomad Capital emphasized that if bold proposals such as making Bitcoin the currency of the United States are put forward, the “Trump effect” may lose momentum. Strategic reserve assets have failed to be quickly realized. He stated that unmet expectations may dampen market enthusiasm.

Roman from Hack VC also stated that one of the most important unresolved questions is: Will the U.S. actively accumulate new Bitcoin, or simply hold the existing seized Bitcoin? Regardless of the outcome, it could be a victory for cryptocurrency. Actively building a Bitcoin inventory could set a new standard, influencing other countries and their policies, which would be a more significant victory for cryptocurrency.