Original Title: Coinbase, Galaxy, Polygon, Multicoin, and other top crypto VCs share their 2024 funding outlook

Original Author: Yogita Khatri, The Block

Translated by: Sharon, BlockBeats

Editor's Note:

Today, The Block interviewed 8 crypto VCs on their outlook for funding in 2024, including Coinbase Ventures, Galaxy Ventures, Animoca Brands, Shima Capital, HashKey Capital, Multicoin Capital, Polygon Ventures, and NGC Ventures. Of these 8 VCs, 6 hold a strong optimistic view on the funding outlook for 2024, and believe that there will be more financing in fields such as DePIN, DeSci, and the combination of artificial intelligence and cryptocurrency. BlockBeats has translated the original article as follows:

In 2023, the financing amount in the cryptocurrency industry decreased by 68% compared to the previous year, reaching only 10.6 billion US dollars. However, top cryptocurrency venture capitalists remain optimistic about the prospects for 2024.

In 2023, the cryptocurrency financing sector faces significant challenges, with total investment plummeting by 68% to $10.6 billion. This sharp decline is in stark contrast to the total investment of $33.2 billion recorded in 2022 and is also the lowest point since 2020.

The multiple factors that led to this decline include historically high interest rates, the rapid expansion of artificial intelligence which diverted people's attention away from cryptocurrencies, regulatory crackdowns, and the consequences of the collapse of well-known cryptocurrency platforms such as FTX, Celsius, and BlockFi.

What is the prospect of cryptocurrency financing in 2024? We contacted the top 20 active cryptocurrency venture capital firms and found that the current sentiment is generally optimistic.

Coinbase Ventures: A Bright 2024

The venture capital arm of cryptocurrency exchange Coinbase continued to invest during the difficult period in 2023 and remains optimistic about the future.

A spokesperson for Coinbase Ventures said, "We believe that the convergence of four factors - regulatory clarity (primarily outside of the United States), mature protocol infrastructure, institutional participation, and user participation in innovative on-chain products - sets the stage for a bright future in 2024."

Our commitment is global, and we remain steadfast. At the same time, we expect to increase our efforts by 2024.

Coinbase Ventures will continue to invest in accelerating the onboarding of the next billion users onto the blockchain, including consumer applications such as crypto infrastructure, social media, gaming, as well as opportunities at the intersection of artificial intelligence and cryptocurrency.

The company will also seek to expand support for teams building on Base through the Base ecosystem fund.

Galaxy Ventures: 2024 will be challenging and mundane

The venture capital arm of billionaire investor Mike Novogratz's Galaxy remains cautious but committed to investing in early-stage projects.

Mike Giampapa, a general partner at Galaxy Ventures, believes that "we expect the cryptocurrency venture capital environment to remain challenging. Even successful enterprises and startups may have to raise funds at par or discounted valuations."

Zhan Paba said that the limited partner community "continues to focus excessively on illiquid investments", which means that new capital entering the venture capital field will be "more restricted", and the financing environment is expected to "remain flat as interest rates continue to rise." However, he also pointed out that as the possibility of industry consolidation increases, large companies may engage in mergers and acquisitions with small companies.

Meanwhile, Zhan Paba stated that startups with sustainable business models and proven product market fit, such as Blockspace and stablecoins, will receive more investment in 2024: "Blockspace is a striking and relatively new product that has achieved product market fit. Due to the combined effect of applications, development talent, capital, and users, consumers are willing to pay more fees for each transaction."

He pointed out that in terms of stablecoins, the market is only seeing the tip of the iceberg in the long-term shift towards tokenization of on-chain assets. "We see many new asset classes being introduced to the chain, providing opportunities for businesses to embed these new financial products into their existing offerings for B2B and B2C applications, and providing opportunities for a new set of infrastructure companies to develop and enable developers to drive adoption," he said.

Animoca Brands: Very Optimistic

The co-founder and CEO of Animoca Brands, based in Hong Kong, Yat Siu, stated that the company is "very optimistic" about the cryptocurrency financing environment in 2024 and expects "healthier" development.

Yat Siu said that with the rebound of the cryptocurrency market, "the momentum has shifted, which may indicate the beginning of a new bull market cycle in the cryptocurrency market."

According to Siu, games and artificial intelligence with web3 components may attract more investment in 2024: "Web3 games are about to accelerate development, especially in Asia and the Middle East, and Europe has also shown considerable interest. On the other hand, artificial intelligence in games will create more engaging and responsive experiences, such as increasing the complexity and depth of NPCs, as well as enhancing content creation and asset generation."

Shima Capital: The Cryptocurrency Industry is Still in its Early Stages

The game director of Shima Capital, a venture capital firm focused on early-stage projects, Alex Wettermann, expressed a "cautiously optimistic" attitude towards cryptocurrency financing in 2024. He expects more investment in infrastructure, gaming, and digital verticals in the coming year.

Westerman said: "We maintain a highly active attitude in this field - we cooperate with investment portfolio companies, conduct in-depth research, and communicate with new companies. This is business as usual for us because we believe that in an increasingly digital, gamified, and tokenized world, we are still in the early stages of the encryption industry."

HashKey Capital: Bullish on the Future of Cryptocurrency Market

The investment partner of HashKey Capital, a cryptocurrency venture capital firm headquartered in Asia, Xiao Xiao, has stated that a "bull market" is expected to arrive next year.

Xiao said that HashKey will actively seek new investment opportunities, including "liquidity investments". The company also plans to expand its asset management business to new markets and launch diversified funds that cater to different investment preferences.

Multicoin Capital: Huge Cryptocurrency Industry Opportunities in the Field of Artificial Intelligence

Multicoin Capital's managing partners, Kyle Samani and Tushar Jain, remain optimistic about 2024, especially considering the recent development momentum of the Solana ecosystem. Samani also believes that the cryptocurrency industry has "huge opportunities" in the artificial intelligence revolution: "Specifically, there is a severe shortage of GPUs (graphics processing units) right now, and the competition for these resources will grow exponentially." He also added that the cryptocurrency industry's use of computing markets and specialized cloud service providers has the opportunity to fill this gap.

Samani said: "Token-incentivized reinforcement learning products are another huge opportunity. The models need to be trained by humans to pass on knowledge. Cryptographic networks are excellent tools for organizing and motivating people around the world to contribute to a common model."

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