Which encryption zones are favourable information from Trump's election? This is what more than a dozen venture capital pros have said.

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

In the past few days, the crypto world has been swept by a whirlwind. After Donald Trump ( won the election, the price of Bitcoin broke through the $93,000 mark. Looking back to 2018 when I first started writing about cryptocurrencies, it felt crazy to see Bitcoin’s price at only around $3,000. But here we are, witnessing the unfolding of the future.

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

**“I think it’s right for the industry to be ecstatic,” said Lasse Clausen, founding partner of 1kx. “You have to be an insider to truly understand the scale of the previous government’s destruction of innovation. So, since 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 viewpoint and points out that “the past few years have been challenging for the crypto industry.” However, she expects 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(. This fund will specifically invest in pre-seed stage cryptocurrency startups. Fisher told me that he expects repeat founders who previously sold businesses for hundreds of millions but hesitated to enter the cryptocurrency space due to legal and regulatory risks will now begin to enter the field as the regulatory environment has alleviated those risks. Fisher said, “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 describes as a “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 the investment team, 5 of whom joined in the past two to three months.

Bet on cryptocurrencies, artificial intelligence, DeFi, etc.

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

Many investors view 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 undisputed hottest category in the crypto space right now,” envisioning a multi-layer web3 AI stack that leverages the cost efficiency of decentralized computing networks. “It’s a trillion-dollar market when serving web2 clients,” Roman said. “AI is not a fad (like NFTs). AI is creating real business value and could be the most significant 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.

Balder Bomans, Chief Information Officer and Executive Partner at Maven 11 Capital, has also observed the continuous growth of crypto AI startups, particularly favoring AI-driven DePIN protocols that provide computation for training AI models. Brukhman from CoinFund added that most retail investors looking to engage with artificial intelligence may 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 AI )deAI(.”

Another focus for investors is the recovery 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 anticipated interest rate cuts by Trump could make DeFi more competitive compared to traditional financial tools like Treasury bonds. He views DeFi as a “once-in-a-lifetime opportunity” to simplify finance.

Clausen from 1kx pointed out that TradFi institutions may now be committed to bringing RWA on-chain and using DeFi infrastructure at scale. Clausen said: “Think about how bad trading, clearing, and settlement are in TradFi, whereas decentralized exchanges )DEX( allow for three-in-one instant trading with no counterparty risk and no publicly verifiable exchange operator fraud.” “It’s like fishing with dynamite; it’s not even fair.”

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

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

“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 worry about retaliation from the Federal Deposit Insurance Corporation (FDIC) or other agencies, which should alleviate the 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 in cryptocurrency, as this category is particularly adversely affected by the impending departure of government policies.” “We are still very interested in DePIN and sustainable infrastructure projects.”

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

Clausen of 1kx added that infrastructure, middleware, and consumer applications are the key categories for his company, especially 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 areas of focus. Miko Matsumura, Managing Partner at Gumi Cryptos Capital, stated that he focuses on “middleware” infrastructure projects aimed at solving “normal problems for ordinary people,” rather than addressing “crypto problems for crypto people.”

At the same time, infrastructure is not as exciting for some investors. Bomans from Maven 11 points out that the company has shifted its focus to application-level investments over the past 12 months, as the rise of strong 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 in infrastructure projects and prefers commercial startups that have obvious distribution advantages and strong user demand.

Zhang from Nomad Capital also mentioned that the company is more cautious in deploying capital on 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 teams that can excel in this unique dynamic are still limited.”

Risks of the Trump Administration

Despite Trump’s presidency bringing new optimism to the cryptocurrency space, several venture capitalists have warned of potential risks that could impact the industry’s trajectory.

1kx’s Clausen expresses concern about Trump’s immigration policy, believing that a decrease in labor supply may lead to rising wages, which could be detrimental to risk assets such as cryptocurrencies.

Nuelle of Galaxy Ventures pointed out that if “Trump becomes too permissive towards the crypto industry”, it could lead to a repeat of failures like 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 like making Bitcoin the currency of the United States are put forward, the “Trump effect” may lose momentum. Strategic reserve assets have failed to be realized quickly. He stated that unmet expectations could weaken market enthusiasm.

Roman from Hack VC also stated that one of the most important pending questions is: Will the United States actively stockpile new bitcoins, or simply hold the existing seized bitcoins? Either outcome could be a victory for cryptocurrency. Actively building a bitcoin inventory could set a new standard, influencing other countries and affecting their policies, which would be a more significant victory for cryptocurrency.