Welcome to our latest newsletter, where we explore the shifting sands of crypto venture capital, regulation, and emerging technologies.
From AI-driven DeFi strategies to on-chain security breakthroughs, you’ll discover where the smart money is moving (and why)!
Table of Contents
- AI & Data Services: The New Golden Child (1–2 minutes)
- The Latest Power Plays (1–2 minutes)
- Fewer Deals, Higher Valuations (1 minute)
- The U.S. Government’s Crypto Pivot (1 minute)
- Where the Smart Money Is Moving (1–2 minutes)
- The Bybit Hack & How ICP Could Lead the Way (1–2 minutes)
- What Is Up With Internet Computer (ICP)? (1–2 minutes)
- Web3 Wisdom — Learn Something New! (1 minute)
Total Reading Time: 8–10 minutes
Where VCs Place Their Crypto Bets
AI/data services are crypto’s newest golden child, soaking up nearly 40% of VC attention. Smarter contracts, AI-driven DeFi strategies, and predictive analytics for trading; VCs are banking on a world where AI doesn’t just support crypto but drives it.
But they aren’t putting all their eggs in one AI basket. Developer tools and payment technologies snag about a fifth of their investments each. That means investors are betting on the infrastructure, not just the applications.
DEX projects, though quieter lately, still captivate nearly one in five funding rounds.
Bitcoin still runs the show. With 57.31% dominance, it remains the gravitational force in crypto. Ethereum? Less so. At 8.64%, its slice of the pie suggests that VCs might be looking elsewhere, maybe to alternative Layer-1s and Layer-2 scaling solutions.
Funds favor moderate, strategic investments, mostly between $1M–$10M. There are still a few outliers like $100M+ rounds for projects in LSDfi and AI-driven blockchain solutions, but they’re rare.
Missed the previous newsletter? Worry not, click on this link to read more.
The Latest Power Plays
Venture capitalists appear to be taking a more measured approach despite the market exuberance.
Avichal Garg, managing partner at Electric Capital, explains this phenomenon,
“What does overall investment activity and volume look like in this sector? It tends to be very cyclical. When prices go up, people want to make more investments. In no small part, that’s because you have a bunch of generalist VCs or later-stage VCs…if you look at it from a smart money perspective, what you tend to see is that the smart money tends to invest heavily in the down cycle and then taper going into the upcycle.”
The days of easy funding for any project with a whitepaper are long gone.
Now, it’s about AI, infrastructure, and strategic bets.
Let’s break down the latest moves, straight from the freshest data in the space.
- Fewer Deals, Higher Valuations
Despite Bitcoin breaking past $100,000 in Q4 2024, crypto VC investment remained flat compared to the previous year.
While the total number of deals didn’t skyrocket, valuations did. The median valuation for crypto VC investments jumped 78% to $32.1 million.
That means VCs are being pickier, but they’re also willing to write bigger checks for projects with real traction.
Robert Le, a senior analyst at PitchBook, summed it up best,
“Three years ago, anyone could raise capital with a white paper and very little traction. Now, that’s not the case.”
- The U.S. Government’s Crypto Pivot
Crypto’s biggest wildcard, i.e., regulation, is finally tilting in its favor.
The CAIA Association reports that the U.S. government is reconsidering its stance on holding crypto assets.
Currently, the U.S. holds over $21 billion in crypto, and new legislation is proposing that these holdings be kept indefinitely rather than liquidated.
That’s not all. The Trump administration’s pro-crypto policies have led to a surge in ETF filings and a potential national crypto reserve. The SEC has even formed a new crypto task force.
The regulatory shift may prove particularly beneficial for institutional investors, as Steven Novakovic, CAIA, CFA, Managing Director of Educational Programs, explains,
“Meanwhile, institutional investors (e.g., venture capital funds) will not be as concerned with legal battles and uncertain regulatory environments, which may prove stimulative for institutional investment activity.”
- Where the Smart Money is Moving
Ethereum had its time. Now, it’s Solana’s turn to dominate the conversation. For the fourth month straight, Solana’s DEXs have outpaced Ethereum in trading volume.
The numbers are undeniable. TVL on Solana jumped 35% to $12.1 billion in January. How? Because of $TRUMP and $MELANIA memecoins, which sent weekly DEX volume soaring 320%.
Whether you love or hate the memecoin mania, one thing is clear, liquidity follows attention. Projects like Jito, Raydium, and Kamino are raking in users, and the entire ecosystem is seeing unprecedented activity.
While Solana steals headlines, another player is silently building momentum, The Internet Computer Protocol (ICP).
The latest data suggests ICP is outperforming competitors in several key areas:
- Functional Versatility: ICP is the only blockchain that supports everything from DeFi to data storage, social media, and gaming..
- Developer Adoption: While Solana (7,625) and Ethereum (6,456) lead in new developer signups, ICP attracted 1,695 developers in 2024, outpacing chains like Polygon (1,103) and NEAR (984).
- Transaction Throughput: ICP processes 2,040 real-time TPS, blowing past Solana’s 1,122 TPS.
- Revenue Growth: In a major milestone, ICP’s daily revenue ($4.303 million) surpassed Solana’s for the first time since 2021. As Markus from ICP tweeted,
“Memes are dying so is the revenue on SOL.”
Wakeup Call from the Bybit Hack and How ICP Can Lead the Way
The recent $1.5 billion hack targeting Bybit via Safe{Wallet} has exposed critical flaws in the current Web3 infrastructure. This attack, executed by the Lazarus Group, exploited vulnerabilities in centralized cloud-hosted systems.
Undoubtedly, it raised questions about the security of “onchain” applications that rely on offchain components.
As Dominic Williams, founder of DFINITY, pointed out, this breach could have been avoided with cryptographically verifiable onchain compute and user experiences (solutions already available through the Internet Computer Protocol (ICP)).
CZ, former CEO of Binance, talked about several critical questions in his analysis of Safe’s response, including how developer machines were compromised and how Ledger verification steps were bypassed.
How ICP Could Prevent Similar Attacks?
ICP offers a comprehensive suite of technologies designed to address vulnerabilities like those exploited in the Bybit hack.
- Hosting entire apps on-chain (including UI) to prevent code injection.
- Using cryptographic verification for all computations, ensuring security.
- Enabling secure multi-chain integration with decentralized control.
- Employing DAOs for secure governance and multi-party asset management.
- Utilizing sandboxed smart contracts to isolate and contain breaches.
For many, the Bybit hack is a wake-up call pushing Web3 toward truly on-chain solutions.
What is Up with The Internet Computer?
February was a whirlwind of innovation and collaboration for ICP as the team made waves at two major events: ETHDenver 2025 and the San Francisco ICP Roadshow.
At ETHDenver, ICP kept the spotlight with Chain Fusion, a technology that’s pushing the boundaries of blockchain by enabling multichain dApps and Bitcoin DeFi integration (building on what we explored in the last newsletter).
Javier Arroyo Ferrer, Co-Founder & Leader of ICP HUB Canada, shared his experience,
“I’m not sure what it is about Denver, but during ETHDenver, you can feel an atmosphere of innovation and technology that’s hard to compare to any other event in the world, and it keeps getting bigger every year.”
The team didn’t just showcase tech; they also rolled up their sleeves, engaging in panels, workshops, and hackathons, connecting with developers, and supporting new ideas that will shape the future of Web3.
Meanwhile, the ICP San Francisco Roadshow brought together DFINITY leaders, innovators, and venture capitalists, creating a dynamic space for discussions on the next era of blockchain adoption.
Highlights include:
- AI & Blockchain Innovation – Panels on decentralized AI (DeAI) and blockchain scalability.
- Stanford Workshop – A deep dive into ICP’s technology with CTO Jan Camenisch.
- Investor Dinners & Meetups – Strategic discussions on Web3 growth and regulation.
The week-long roadshow, packed with multiple events, showcased ICP’s vision and commitment to bridging Web2 and Web3, making decentralized technology more accessible than ever.
Through each event, ICP is extending its reach, showcasing its technology to a growing global audience.
What Is Internet Computer Roadmap in 2025?
ICP is expanding its capabilities with the 2025 Roadmap Update, introducing over 20 new features for sovereign computing, AI integration, blockchain interoperability, and developer experience.
- Optimized canister performance, improved load balancing.
- The launch of Caffeine, an AI-driven platform for building applications through natural language prompts.
- ICP-Solana integration and Dogecoin smart contract functionality.
Just the tip of the iceberg!
Web3 Wisdom — Learn Something New!
What Are Canister Smart Contracts?
Canister smart contracts on ICP combine program logic, state, and storage into a single, self-contained entity.
Unlike traditional smart contracts that primarily handle transactions, canisters enable fully on-chain applications. Yup, complete with frontend, backend, and data storage.
Also, unlike Ethereum smart contracts, which focus on executing financial logic, canisters maintain state persistently across executions.
Some components include:
- Code and State in One Unit – Canisters store both executable code (WebAssembly modules) and persistent state, eliminating the need for separate databases.
- Scalability and Performance – Advanced memory management, subnet scaling, and orthogonal persistence allow canisters to handle large datasets and complex computations.
- Seamless Web Integration – Canisters serve web content directly from the blockchain, delivering frontend, backend, and storage in a single deployment.
- Asynchronous Execution Model – Inspired by the actor model, canisters process messages in parallel while maintaining data integrity and security.
- Cross-Chain and Web3 Connectivity – Chain Fusion enables native interactions with blockchains like Bitcoin, Ethereum, and Solana, while HTTPS outcalls allow direct access to external Web2 data sources.
In short, canisters help power entire dApps (front-end, back-end, and data) on-chain, enabling a new class of decentralized applications, from DeFi and NFTs to AI-based services.
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