Despite the geopolitical tensions caused by the US trade war that caused a decline in most liquid tokens, venture capitalists continued to focus on the core utility of cryptocurrencies, particularly stubcoin.
Stablecoins’ VCS’s growing positive view
The geopolitical tensions caused by the US trade war benefited quarterly profits across most liquid tokens, but venture capitalists (VCs) were still searching for crypto core utility rails. This interest is evidenced by growth of between $25 billion and $227.1 billion from growth in Stablecoin market capitalization, even if token prices recede.
According to the latest Pitchbook report on Crypto VC Trends, the various fates of the Stablecoin Market indicate a growing positive view of VCs on Stablecoins.
“The dollar-controlled settlement remains a crypto killer application. It is insulated from the wider risk-off movement. This remains the hope that payments, remittances and financial management startups, particularly those, could increase periodically in increments of periodic growth,” the Pitchbook team explained in the report.
The crypto market has since erased much of its trade-inducing loss in the first two months of the second quarter, but the pitchbook team believes it will only commit more if the industry is working to tackle security concerns amplified by the Buybit Hack. The team also predicts that more and more institutional investors will demand real-time booking tools and middleware that “abstracts” the complexity of key management. The startups that address these issues will likely attract funds, the team added.
Meanwhile, the report notes that retail speculation will be cooled over the quarter, leading to a decline in Memecoin volume, particularly in Solana, and a shift in solubility to other blockchains in search of higher yields. Declining retail activity has eased investment in meme token trading applications. The report stated that Circle’s upcoming initial public offering (IPO) is a key event in encryption and could validate the Stablecoin model. Successful IPOs could boost crypto payments and evaluations across the infrastructure sector.
“We got together, the first quarter of 2025 was a quarter of consolidation rather than surrender. The beta of the market has been negative, but venture-related signals – stubcoin growth, infrastructure risks, and reliable IPO pipelines – liability is invalid,” the team argued.
The Pitchbook team added that the combination will set the stage for a more “basics-driven” deployment in the coming months.
