Insights4.vc: Current status of venture capital and stablecoin in 2025

Author: insights4.vc Translation: Shan Oppa, Bitchain Vision

Large funds have expanded rapidly over the past decade, but a group of “zombie unicorns” (startups that have valuations of over $1 billion but lack clear exit prospects) and the long-standing downturn in IPO/M&A markets have made portfolios less liquid.Limited partners (LPs) are facing liquidity tightening, as evident in the sale of billions of dollars in secondary market share at universities such as Harvard and Yale.At the same time, hype in the generative AI field has attracted a large influx of capital, delaying the overall market adjustment.Bill Gurley warned that the liquidity cycle in the private equity market is being extended like never before, with private equity giants replacing public listings through appointment-based transactions such as Stripe large-scale private equity financing, and companies are also postponing or even giving up IPOs.

at the same time,Stablecoins are leaping from niche tools for cryptocurrencies to mainstream fintech drivers in 2025.USD-anchored tokens such as USDC and USDT have now exceeded US$250 billion in circulation, with trading volumes of approximately US$30 trillion last year.However, the user identity and usage scenarios of stablecoins are still highly opaque – Artemis research points out that due to multi-chain fragmentation and pseudo-anonymous addresses, it is very difficult to track the use of stablecoins.Despite the limited data, the core potential of stablecoins is unquestionable: they can completely simplify the traditional payment value chain.Fintech analysts believe that stablecoins allow any company to bypass card organizations and bank networks and directly transfer value through the ledger transfer model. This paradigm shift may give birth to the first fintech giant with a market value of $1 trillion.This has also attracted the attention of regulators: In June 2025, the U.S. Senate passed the bipartisan GENIUS Act, the first important stablecoin bill that requires issuers to hold reserves 100% and disclose monthly, and explicitly restrict large tech companies from issuing stablecoins.This legislative momentum and the outstanding performance of Circle after its listing (the stock price has increased by about 6 times since its listing), means that regulated stablecoins are becoming a new “funding channel” for Internet finance, not only limited to the crypto field.

This report explores the intersection of venture capital and stablecoins at the current market.We will analyze Gurley’s pessimistic outlook on VC liquidity in 2025 (Section 1), and how stablecoins can rise as a disruptive force in the payments industry (Section 2); then explore Stripe’s crypto strategy case study in 2025, including the acquisition of Privy and Shopify’s stablecoin integration, and Coinbase’s new merchant payment service (Section 3); Section 4 analyzes the intersection between the two—from the flow of venture capital funds to crypto payment infrastructure (compared to weaker investment in new public chains), to large secondary markets and cross-round financing trends that echo the instant transfer characteristics of stablecoins; finally, we will look forward to several scenarios for 2025–26 (Section 5), including benchmark scenarios, optimism scenarios and stress scenarios.The core conclusion is: venture capitalists must adapt to the new reality of longer liquidity cycles and market differentiation, and the maturity of stablecoins will completely change the financing, capital use and income models of startups.These trends have a profound impact—from Silicon Valley Dune Road to Capitol Hill.

Venture Capital Status in 2025: Gurley’s Perspective

Bill Gurley On the Opportunities and Costs of Privatization

Bill Gurley recently summarized the seven “market realities” that impacted the venture capital industry in 2025.These interrelated factors provide a clear framework for the challenges faced by investors and entrepreneurs, as follows:

1. The era of giant funds: The amount of funds of top VCs has expanded dramatically.The $500 million fund that used to focus on early stage investment now raises billions of dollars and bets on large amounts of money at all stages.Hedge funds such as Coatue and Altimeter have also poured in to raise funds in the late stage, and giants such as SoftBank Vision Fund have made great efforts.The result is a sharp increase in capital supply, pushing up valuations and expectations, and increasing the risk of corporate overcapacity.Some one-year-old startups can also receive $300 million in financing, nominally “latest stage” but actually a rare super large check.This trend is redefining the industry structure and also means greater risk of capital mismatch.

2. “Zombie Unicorns” pile up: The giant fund boom has spawned a large number of overvalued unicorn companies with unknown prospects.About 1,000 VC-backed companies have entered the $1 billion club in recent years, with a total financing of approximately $300 billion.But many of these companies raised funds at extremely high price-to-sales ratios in the bull market in 2020–21. Now growth is slowing down, and valuations are difficult to regain their glory.Many companies have hundreds of millions of dollars in cash on their accounts, which can barely survive or even make profits, but they can no longer grow enough business volume to match high valuations.Gurley calls it “zombies”, meaning they are trapped in the past, never dead or alive, and LP funds are trapped for a long time.

3. Motivation mismatch and impasse: These distorted incentive mechanisms have made the market “rebalancing” delayed.Capital proliferation during the zero-interest rate period drives inflated valuations; after interest rates rise and market decline, large-scale downturns or liquidation should occur as usual.But many startups choose to tighten their belts to extend their capital life and avoid financing at low prices, thus delaying revaluation of value.Adding clauses such as liquidation priority, resulting in unprofitable mergers and acquisitions or sales. This vicious cycle has freezed the market.

4. Exit the Desert: IPO and M&A exhausted: The exit channel is almost closed.Gurley stressed that even if the Nasdaq market rose by 30%, few VCs supported the company’s listing, and almost no large-scale mergers and acquisitions were implemented.This is partly because of the complex antitrust environment and acquisition process (for example, a $300 million acquisition may also drag on for a year), and partly because of the excessive cost of public listing and the burden of disclosure, resulting in the long-term existence of “exit the desert” and funds can only be left on the books.

5. LP liquidity tightening: Limited partners who over-allocate illiquid assets during economic boom are about to face a debt crisis.Limited partners such as endowments and pension funds are facing funding shortages as income from venture capital and private equity funds have been significantly reduced.In the first quarter of 2025, U.S. universities issued $12 billion in new bonds, the third highest in history, mainly to make up for the operating budgets covered by endowment funds in the past.Some top universities are actually borrowing money to meet capital needs now.What’s more striking is thatHarvard and Yale UniversityIn the first half of 2025, it announced plans to sell most of its private equity portfolio in the secondary market (about $1 billion and $6 billion, respectively).Yale’s move is particularly striking: As a pioneer in the endowment model, Yale is abandoning the illiquidity strategy it once advocated.Gurley sees this as a big change—if the most influential limited partners start to reduce their investment, it indicates that the surplus of venture capital over the past decade is no longer sustainable.This means: New venture capital fundraising may face more skeptical (or tight funding) limited partners, some of which trade at discounted prices in the secondary market, resulting in losses.This dynamic forces venture capital firms to find liquidity solutions for their portfolios so that limited partners can’t weaken their support.

6. “Privatization is openness”:IPOOne irony of window closing is that many successful startups no longer need IPOs as they used to be.Adequate private capital means that companies can raise huge amounts of money to fund growth or provide liquidity to their employees while remaining privatized indefinitely.Gurley quips that in today’s environment, for many growth companies, privatizationMore attractive than listing.If you still get cash, it’s attractive to avoid the burden of compliance in the open market and the scrutiny of quarterly earnings.We have seen the rise of private secondary markets and tender offer acquisitions that provide some liquidity to early investors without the need for public listing.In addition, likeNew entrants like Thrive CapitalCreated a “book-only” market for pre-IPO giants.Stripe, one of the most well-known private decameras, planned a $6.5 billion round in 2023, the round equivalent of a private IPO that allows employees to sell their shares while introducing large investors who might have taken stakes at the time of the IPO.Such transactions indicate that a quasi-open market is operating on an appointment basis, with selected late-stage funds holding large shares (10-30%) rather than publicly available shares.This trend has sucked away the returns earned by open market investors in the past and challenged the venture capital model: venture capital firms may hold their profitable projects for longer, or even partially cash out, in these super-large private equity rounds.In short, the traditional venture capital timeline (about 8 years from Series A to IPO) has been distorted; companies may remain privatized for more than 12-15 years under a temporary liquidity mechanism that operates privately.

7. AI boom delays market clearance: The last reality: Just as the venture capital market cools down in 2022-23, a new hype cycle has arrived – generative artificial intelligence.At the end of 2022, the launch of ChatGPT and related breakthroughs in large language models triggered what Gurley called an extremely favorable wave of enthusiasm.By mid-2023, venture capital sentiment has once again changed from fear to missed phobia (FOMO), and this time, everything revolves around artificial intelligence.Investors who have been divestment have suddenly flocked to AI startups, which are valued 10 to 20 times higher than normal.This influx of funds, including non-traditional capital from sources such as the Middle East sovereign funds, effectivelyCrushed in new funds, and supports the venture capital market as a result of a healthy pullback.While technical excitement is justified, the choice of timing means that the venture capital ecosystem has never completely “reset” all valuations.Many non-AI companies benefit indirectly — a wave of rising generally boosted financing sentiment in early 2024.Gurley’s view is not that artificial intelligence itself is overhyped, but that it delays the liquidation day of traditional unicorns with overvalued valuations.For venture capitalists, this means dealing with two conflicting trends: either investing in AI or risking missed opportunities; or backlogs of overvalued portfolio companies still need to exit or cut their prices.Gurley’s warning to peers and founders is clear—Don’t mistake this AI-driven breathing for a return to the situation in 2021.Liquidity is still hard-won and requires strict screening.

Gurley’s conclusion

The VC industry in 2025 is full of delays.Cheap funds and excessive fanaticism have spawned too many unicorns and too few exits, resulting in a market not a violent collapse, but a long bloody process.Gurley wants to convey the message: Patience is crucial – funds may need to extend their investment life cycle and manage reserves carefully, and GPs should also convey to LPs that paper returns will be bleak for a long time until they are truly withdrawn.Visionary funds are exploring new liquidity avenues (such as secondary market share sales, structured transactions) to adapt to the new normal.Overall, venture capital is undergoing severe tests that have not been seen since the bursting of the Internet bubble, and the difference this time is that the scale of the private equity market is unprecedentedly large.So, what does this mean?Investors and founders must adjust their expectations: the road to monetization may be longer and more tortuous.Against this backdrop, VCs began to turn their attention to tracks that generate revenue potential in the shorter term, and one of them was the financial infrastructure sector.This is the trend of stablecoins and emerging crypto business ecosystems, which not only lead to growth, but may also mean (at least in terms of capital circulation) to achieve liquidity faster.In the second part, we will enter the parallel world of stablecoins: This is a rapidly evolving market that is solving some problems in another way (such as slow, high-cost payments), and the venture capital industry is also struggling with others (such as slow, difficult exits).

2025 Stablecoin Snapshots – From Data Gap to Mainstream Breakout

As venture capitalists reorganized their positions, the stablecoin track was racing, and the scale and legitimacy of development in 2025 far exceeded expectations a few years ago.Stablecoins—digital tokens anchored with fiat currencies (mainly the US dollar)—have become the “king of topics” in the fintech circle.There are new progress almost every week: Stripe enables stablecoin payments, PayPal launches its own stablecoin on the new public chain, and the U.S. Congress pushes for new legislation… The second part of this article will focus on the current situation of the stablecoin market on June 20, 2025, including: (a) data and usage trends, (b) stablecoin disruption potential in the payments field, and (c) regulatory watershed moments being staged in the United States.

Adoption is growing rapidly, but the data is still blurred

By mid-2025, the total market value of USD-backed stablecoins has exceeded US$220 billion, roughly equivalent to the sum of the market value of the top 20 banks in the United States.Currently, the market is dominated by two giants Tether (USDT) and Circle’s USD Coin (USDC), with their respective circulation volumes ranging from about US$60 billion to US$100 billion. Others such as PayPal’s PYUSD and various financial technologies or DeFi tokens also occupy a place.The usage is even more amazing: Coinbase reports that stablecoins contributed to trading volumes of about $30 trillion in 2024, three times the previous year.This part of the transaction volume mainly comes from crypto trading and DeFi activities (stable coins are the standard medium for liquidity pools and lending protocols), but stable coins are increasingly entering the real economy and remittance scenarios.Stripe said global stablecoin payment settlements have exceeded $94 billion in the past two years, and monthly payments have grown from less than $2 billion to more than $6 billion.

Ironically, although these tokens run on open and transparent blockchains, the analysis of stablecoin usage is more complicated.A recent study by Artemis pointed out that as data is spread across dozens of blockchains and layer two networks, analysis has become extremely fragmented.USDC has been deployed in Ethereum, Solana, Polygon, Stellar, Base and other networks, and each network has its own data structure and characteristics, which means that multiple sources must be integrated to track the overall usage of a certain stablecoin.Artemis jokingly claims that we are going through a blockchain version of the “early PC era”—“every major network speaks a different language”.For example, analyzing PayPal PYUSD’s capital flow requires understanding Ethereum and Stellar (because PYUSD recently integrated Stellar), and even understanding LayerZero bridge transactions.This means that even the most proficient analysts have difficulty answering basic questions, such as “Who is using the stablecoin and what is its purpose?” The on-chain address is just anonymous character, lacking off-chain background such as exchange labeling and merchant wallet information, resulting in “a certain $100 transaction” being almost the same as another one.Artemis refutes the myth of “blockchain data is completely transparent” – in fact, understanding the flow of stablecoin funds requires a lot of data augmentation and assumptions.Therefore, although the market value and transaction volume data are eye-catching, fine-grained information (such as retail and institutional ratios, domestic and cross-border use, etc.) will still appear vague in 2025.This is also one of the reasons why regulators are cautious – it’s hard for you to supervise things that you can’t clearly measure.

Although the visibility is not perfect, several qualitative use trends are already obvious: stablecoins are widely used in (i) cross-border payments and remittances (especially emerging markets, due to difficulties in obtaining US dollars, such as Argentina and Nigeria, where stablecoins provide digital dollar liquidity without a US bank account); (ii) cryptocurrency transactions and DeFi (stablecoins are safe havens for entry and exit channels and turbulent markets, with liquidity pools and lending agreements in billions); (iii) e-commerce and merchant payments (emerging scenarios in 2025, such as Shopify opens USDC settlement); (iv) corporate capital and financial technology applications (Stripe has launched a stablecoin account service for enterprises, allowing enterprises to manage USDCs and other stablecoins like fiat currency, especially for companies operating across countries or in unstable currency markets, which means the stability of the US dollar and the instant settlement speed of encrypted).These widespread application scenarios emphasize why stablecoin supply remains at an all-time high after the crypto bear market in 2022: they meet the fundamental demand for high-speed programmable dollars.

Payment subversion theory: Bypassing traditional payment systems

In April 2025, Rob Hadick provocatively pointed out that stablecoins herald the “collapse of traditional payment models.”His view is that stablecoins are not just fashion trends in fintech or an affiliated feature to existing payment networks, but a new end-to-end payment architecture that can replace the old-fashioned payment networks that banks and processors piece together.Today’s bank card payment model involves a bunch of intermediaries – issuing banks, acquiring banks, card organizations, payment processors, gateways, etc. – each party collects a part of the fee.Merchants may have to wait a few days before settlement, and they will also lose a 2–3% handling fee.Stablecoin payment is different. It can settle point-to-point on the blockchain, which only takes a few minutes or cents, and does not require intermediaries.If merchants and consumers use the same stablecoins (such as USDC), then payment is essentially a ledger update—as Hadick said, “everything is a book transfer.”This will completely simplify the value chain: many old middlemen and their expenses can be completely bypassed.

The key is,Stablecoins allow non-banks and technology companies to operate payment systems on a large scale.A startup can become its own “payment network” by simply integrating a stablecoin wallet into its application, which is almost impossible to achieve without a bank license or cooperation with a payment processor in the era of bank cards.We have seen a group of new companies with this concept as the core: financial technology for payroll based on stablecoins, remittance companies that exchange stablecoins for foreign exchange arbitrage, and merchants who have begun to accept stablecoins as online payment methods.Hadick predicts that the first trillion-dollar fintech company will be the one that completely embraces stablecoins and redefines payments.Although it has not yet been achieved, industry giants are also beginning to pay attention to this trend: Visa’s CEO says stablecoins can achieve all-weather settlement, which is a “promising” innovation and has launched a pilot program for cross-border settlement with USDC.Similarly, Mastercard also signed a cooperation agreement in 2025 to enable stablecoin payments based on its network for consumers and merchants.In short, this subversive theory believes that stablecoins can digitalize and de-intermediate the payment industry like VoIP for telecommunications, reducing costs to nearly zero.Moreover, stablecoins are also programmable: payments can be smart contracts, which makes new business models (such as micro-charge calls by API, automatic unsecured funds by delivery, etc.) easier to implement than traditional systems.

Hadick’s view is not a paper talk, and the realistic signals are everywhere: PayPal launched its own dollar stablecoin (PYUSD) in 2023, and announced in 2025 that it would natively integrate the currency on multiple blockchains (Ethereum and Stellar); Stripe’s business direction also conforms to the view that stablecoins are regarded as a new payment track; and traditional cryptocurrency exchange Coinbase is also using stablecoins to expand merchant payments.All of the above projects bypass at least one layer of old financial infrastructure, which is why Shopify CEO recently pointed out that stablecoins are the “natural” solution for Internet business – for global platforms, breaking away from the constraints of various banking systems in exchange for an interoperable dollar token will undoubtedly reduce the burden.Of course, the challenges still exist (volatility has been solved, but issues such as returns, fraud, and compliance still require new solutions in the stablecoin system), but this development momentum is obviously increasing.

Regulation and GENIUS Act

One major advance in mid-2025 is that decision makers finally provide clear rules for stablecoins.On June 18, the U.S. Senate passed the “Government Electronic National Institutions Stable Coin Unit Act” – the first comprehensive stablecoin legislation in the United States.The bill passed successfully with a rare bipartisan cooperation (68 to 30) and is expected to be approved by the House by the end of the summer.The core provisions of the bill include: (a) requiring any payment stablecoin issuer to hold 100% of the reserves (such as cash, treasury bills, etc.) and to disclose the reserves publicly every month; (b) restrict the issuance rights to belong to regulated entities and explicitly prohibit large technology companies from issuing stablecoins on their own; (c) clearly defined redemption rights; (d) grant the U.S. Treasury Department or the Federal Reserve corresponding regulatory powers.The market responded quickly: USDC issuer Circle’s newly listed stock soared, and Coinbase’s stock price also jumped.Analysts say stablecoins are expected to evolve from “money tracks of cryptocurrencies” to “money tracks of the Internet.”The passage of the bill means that Washington will not ban or curb the dollar stablecoin, but will choose to be included in the scope of regulation, which not only gives industry legality but also raises the threshold for new entrants.

In addition, other jurisdictions have also taken action: stablecoin rules have been included in the EU MiCA framework, and many countries are also studying the issue of coexistence of central bank digital currencies and private stablecoins.In the United States, another impact of the GENIUS bill is the reigniting of corporate interest: several large financial institutions are discussing issuing their own stablecoins or tokenized deposits, and a large banking alliance also launched a pilot project of “Deposit-backed stablecoins” in early 2025.The line between encryption and traditional payments is rapidly blurring.

In summary, by mid-2025, stablecoins have been at a critical breakthrough: mainstream technology and financial giants are being integrated on a large scale, users have transferred hundreds of trillions of dollars through stablecoins, and regulation is also standardizing their role in the financial system.The remaining challenges – data transparency, anti-money laundering/real-name compliance, and user experience technical issues – are notable but actively addressed.Stablecoins, like digital wallets and emerging banks have developed over the past decade, are expected to move from the edge to ubiquitousness in the coming years.So, what does this mean for investors and policy makers?Stablecoins are both opportunities and strategic variables: they can reduce costs, expand financial access, but they can also redistribute profit pools and require updated regulatory systems.For venture capital, stablecoins are not only a new investment track, but may also become a tool to make capital management and circulation more efficient, thereby improving all aspects of capital use in the entrepreneurial ecosystem.

Stripe, Privy and Stablecoin Stacks landed

In 2025, no company can perfectly interpret the intersection of venture-backed giant fintech and stablecoins like Stripe.Stripe, once a traditional online payment processor, has decisively turned to crypto and stablecoin infrastructure over the past year.This section analyzes Stripe’s strategy through its recent acquisition of Privy (June 2025) and a series of related actions, and compares Stripe’s path with Coinbase’s advancement in stablecoin payments.

Stripe’s encryption restart

Stripe had been involved in Bitcoin payments back in 2014, but gave up the attempt in 2018 due to sluggish market demand and excessive handling fees.For many years, Stripe has been away from the crypto circle.However, at the end of 2024, Stripe CEO Patrick Collison announced that the company was aiming to “build the world’s best stablecoin infrastructure,” marking a strategic turn.They quietly began to piece together modules and tried to use stablecoins as the core part of the platform.In October 2024, Stripe acquired a startup called Bridge for a huge $1.1 billion (the founder of Bridge was also a Stripe member).Bridge is positioned as a “stablecoin orchestration” platform, essentially a middle layer, helping companies easily integrate stablecoin payment, custody and foreign exchange services.Technology developed by Bridge can connect stablecoins to fiat currency card networks. For example, it cooperates with Visa to enable financial technology applications to issue Visa cards directly using users’ stablecoin balances.In February 2025, Stripe completed a Bridge acquisition and incorporated the team into its newly formed crypto division.This integration quickly showed results: In May 2025, Stripe used Bridge technology to launch Stablecoin Financial Accounts, helping businesses in over 100 countries hold funds in stablecoins (initially supported USDC and Stripe’s self-issued USDB) and smoothly pay and settle with these stablecoins.This is equivalent to expanding Stripe’s existing core payment service that only deals with fiat currencies to the digital dollar field, with Stripe taking on the crypto complexity in the backend.

Privy Mergers and Acquisitions (June 2025)

To complement Bridge, Stripe announced the acquisition of Privy, a startup focused on crypto wallet interfaces, on June 11, 2025.Privy provides developers with an embedded wallet API that helps any application create and manage blockchain wallets for users without having to get a deep understanding of encryption details.Privy had supported more than 75 million accounts for financial technology and Web3 applications before it was acquired, and in March 2025, it received US$15 million in financing from top investors such as Sequoia, Coinbase Ventures, and Ribbit, which also shows that the investment circle is confident in this “water-selling” crypto infrastructure.Although Privy’s acquisition price has not been disclosed, its strategic value is comparable to Bridge. Why does Stripe like Privy?Because Privy adds the key puzzle: wallet infrastructure.If Stripe wants to support stablecoin payments from beginning to end, it must help merchants and users actually hold and manage these tokens.Bridge provides Stripe with stablecoin payment channels and bank integration; Privy adds a user-side wallet layer to Stripe.In the words of the Privy team, both Stripe and Privy want to “blurr the boundaries between crypto and fiat currency to almost disappear.”With Privy, Stripe can provide users’ wallet activation, key management, on-chain operations and other services to any network merchant through a simple API.

It is worth noting that Stripe currently allows Privy to continue operating as an independent product.This also continues the Bridge model – integrating its technology and providing services separately to the outside world.This dual-track strategy helps Stripe build itself into a one-stop crypto service platform: developers can use Stripe to make credit card payments, and manage stablecoins and wallets through it.

Provide stablecoin payments for Shopify and other platforms

Stripe encryption integration results are quickly implemented: June 2025,Stripe announced a key collaboration with Shopify to access USDC payments for millions of merchants.The partnership allows Shopify merchants in 34 countries to accept USDC, a dollar stablecoin, directly at checkout, with Stripe responsible for payment processing.Buyers can pay using Base (Coinbase’s Layer 2 network) and any compatible wallet.Stripe provides merchants with two options in the backend: one is to automatically exchange USDC into merchant local fiat currency (such as euro or Indian rupees) and directly settle into the merchant bank account; the other is to directly deposit USDC into the merchant’s wallet selected by the merchant.All this requires little extra business operations, just toggle the functionality in the Stripe console.Shopify COO commented: “Stripe has always helped us handle the hardest payments and now has done this for stablecoin payments.” It emphasized that merchants can seamlessly access this “big growing global crypto payment demand” without having to compete with exchanges and volatility risks.

For Stripe, this integration is an important means of competitive differentiation.Stripe now reaches users who prefer to pay in cryptocurrency, including a large number of Web3 native users and overseas buyers, which is also attractive to merchants who want to reduce fees for exchange and card organization.For example, Argentine users can use USDC to pay US merchants to avoid the pain points of exchange rate and card handling fees.Given Shopify’s huge merchant base, this means that stablecoins are quickly becoming a new force that cannot be ignored in e-commerce payments, rather than a marginal pilot.

End-to-end stack collaboration

By combining these components—Bridge’s payment channels, Privy’s wallet, and Stripe’s existing merchant network—Stripe essentially creates an end-to-end stablecoin payment stack.Imagine the current scenario: users on a market platform can hold USDC balances (Stripe/Privy manages wallet keys behind the scenes), spend this money offline with Visa cards (through Bridge-Visa integration), and can also check out in the Shopify store (through the newly launched Stripe checkout process), while merchants can choose to retain crypto assets or instantly exchange them for fiat currency while receiving stablecoins.The entire process complies with regulatory and risk standards, and Stripe is responsible for the user experience.This also means that Stripe is positioning itself as “AWS in the crypto world” – providing developers and merchants with a complete set of tools that allow them to seamlessly operate capital flows without understanding the blockchain or dealing with multiple intermediaries.

It has to be mentioned that Stripe’s timing is very clever.When they restarted their crypto business, regulation became clearer (the US Treasury Secretary even expected the stablecoin market size to reach $2 trillion by 2028), and real implementation cooperation like Shopify emerged.Stripe has always been known for its huge market ambitions (and they even deliberately postponed their IPOs to keep it innovative), these actions ensure that it can stand firm at the forefront of payment innovation.For venture investors, it is also a case where mature unicorns gain growth by entering emerging sectors (Stripe is valued at about $50 billion in secondary markets), and it is integrating what was once considered a “risk frontier” into its own growth flywheel.

Coinbase’s challenge

As the stablecoin payment space heats up, not only old fintech giants such as Stripe and PayPal have joined, but native crypto companies are also taking action.Just a week after Stripe announced its cooperation with Shopify, Coinbase released “Coinbase Payments” on June 18, 2025, aiming to enter the global merchant payment market with its own advantages (such as Ethereum Layer 2 network Base and its huge user base).The plan they described has also been launched with Shopify, which means that Coinbase is likely to participate in Shopify’s same stablecoin integration, but provides services to merchants who prefer Coinbase as a payment service provider.The Coinbase solution is slightly different: it emphasizes a modular stack, including a Stablecoin Checkout (a widget that supports user wallet payments such as MetaMask and Coinbase Wallet, which is paid by Coinbase to achieve a user’s “zero Gas” experience), an e-commerce engine (providing merchants with APIs for handling refunds, reconciliation and other operations, similar to Stripe Connect), and a Payment Protocol (supports advanced features such as delayed deductions and dispute handling through smart contracts).In other words, Coinbase is also moving many traditional payment processes (such as delayed settlement and dispute arbitration) to the chain with the programmability of smart contracts.

From the perspective of market positioning, this stablecoin payment war may be similar to the existing business models of the two: Stripe is aimed at mainstream merchants that value ease of use and integration with the existing payment architecture, while Coinbase focuses on encrypting native users and deeply integrating the Base network ecosystem.Interestingly, the market is big enough that there is room for both directions – after all, Shopify hopes to work with more service providers to drive the growth of merchant payments.The real competition may be who can better capture the profits and user minds of this new payment track.Currently, both have received positive market feedback: Coinbase Payments’ stock price rose after its release, and USDC issuer Circle also rose sharply, reflecting investors’ optimistic expectations for the increase in stablecoin circulation and usage, which directly affects Circle’s earnings (through reserve interest income) and Coinbase’s transaction fees.

Shopify, Coinbase and traditional giants

Shopify has become a key node connecting established e-commerce and emerging stablecoin networks here. This is no accident – Shopify’s total commodity transactions in 2024 were approximately US$200 billion, and it is almost “default support” another payment channel parallel to Visa/Mastercard for its own platform.Shopify CEO Tobi Lütke has also been an advocate for crypto (individuals also hold BTC and ETH for a long time). If the USDC pilot shows even minor results (such as improving checkout conversion rates in markets with low credit card penetration, or reducing payment fees), then it can be foreseen that Shopify will be promoted on a larger scale, and even encourage more e-commerce giants (such as WooCommerce, Amazon, Walmart, etc.) to follow up to avoid lagging behind.

All of this is still in its early stages, but the integrated picture (stripe, Coinbase, Circle, Visa and others jointly took action) is pushing stablecoins toward daily business scenarios, and no longer limited to the inside of the crypto circle.

Conclusion

The Stripe-Privy case also clearly shows how large-scale, well-funded private giants can build a complete technology stack to seize emerging opportunities through mergers and acquisitions.Stripe exchanges venture capital and shares for control of startups like Bridge and Privy, helping them quickly achieve the ability integration that can only be completed after years of independent research and development, and ultimately brings the complete stablecoin payment ecosystem under its jurisdiction.For the industry, this also means that fintech and encryption are being integrated, and in the future, those platforms that provide the smoothest and secure experience for developers and merchants will win the stablecoin payment track.Stripe has significant first-mover advantages in user experience and distribution capabilities, while Coinbase can demonstrate its strength in innovation speed with its own encryption profession and Base network ecosystem.In the next year, this stablecoin payment race will undoubtedly enter a fast-paced and high-intensity iteration stage.

The intersection of venture capital and stablecoins

At first glance, venture capital financing and stablecoins appear to be two unrelated areas: the former is about how startups get funds, and the latter involves how payments are processed.But by 2025, the link between the two is getting closer.This section will explore two major intersections:(a)How venture capital is flowing to the stablecoins and crypto payments sectors (compared with other crypto segments), and(b)The wide range of venture capital liquidity and financing dynamics are drawing inspiration from the global liquidity that is available to stablecoins all the time.

VC investment direction changes: from hype to crypto infrastructure

After the speculative boom in 2018 and 2021, venture investors have become more picky about crypto tracks.The collapse of many tokens and exchanges in 2022-23 calmed the market down.The new round of enthusiasm for the crypto field in 2025 will focus on infrastructure that can be implemented and practically used, and stablecoin-related startups are typical examples.Rather than investing in another new Layer-1 public chain or a meme coin, VCs are more willing to invest money for companies that provide “picads and shovels” in the digital dollar economy.Privy (see Section 3) is an example: it is a company focusing on B2B crypto infrastructure, without token issuance and speculation, but it attracted front-line investors such as Ribbit, Sequoia and Coinbase, and was finally acquired by Stripe on generous terms.Similarly, stablecoin compliance tools, wallet integration API platforms, and cross-border payment service providers based on stablecoins can also get funds and have a healthy valuation, which is in contrast to those purely hype crypto projects.

According to PitchBook data, the amount of venture capital financing for crypto/blockchain infrastructure (including payments, custody, development tools, etc.) in the first half of 2025 is much more stable than that of consumer applications or new protocol tracks.In other words, many VCs are beginning to refocus on the “Picks and Shovels 2.0” that lay the foundation for the digital dollar economy, helping mainstream companies adopt crypto assets (such as stablecoins, tokenized physical assets, etc.).

One of the reasons for this is that these infrastructure startups tend to have real revenue, or at least have clear business models (such as SaaS or transaction fees), which is very consistent with investment preferences after 2022: from blindly pursuing growth to pursuing a practical and sustainable business model.Another reason is strategic considerations: Many traditional fintech investors now regard stablecoins as the core of the future of fintech and no longer treat them as edge experiments.Therefore, investors who may have avoided it in the past are now willing to take the lead in financing rounds such as stablecoin payment gateways and on-chain foreign exchange platforms.This is similar to the trend after the Internet bubble: investors switched from websites to investing in underlying services such as cloud computing, and achieved great success a few years later.And today, investing in stablecoin infrastructure may help them bet on the next Stripe or PayPal.

Are crypto funds also turning to equity investment?

Interestingly, crypto-native VC funds that raised huge sums in 2021, such as those of Andreessen Horowitz’s multi-billion dollar crypto funds, have had to adjust their strategies.Because of the poor liquidity and high risk of token investment, these funds now invest more frequently, such as investing in companies that provide infrastructure, such as Circle (now listed), Ledger, Fireblocks, etc.Circle’s listing in New York in June 2025 is a VC liquidity feast: After the SPAC plan to abort in 2022, this IPO gave long-term supporters (such as Goldman Sachs, DCG, etc.) the opportunity to cash out, and also set a comparable target for stablecoin companies in the open market.Circle’s market value after listing was about $44 billion (at that time, USDC circulation was about $61 billion), providing reference standards for financing other stablecoin startups, such as startups that are issuing stablecoins in Asia, or DeFi protocols that rely heavily on stablecoin liquidity.

Secondary market and liquidity innovation

Another point of contact between venture capital and stablecoins is liquidity pursuit.As stated in Section 1, Limited Partners (LPs) and VCs are seeking liquidity through the secondary market, which echoes the crypto market’s ability to buy and sell at all times.For example, Yale University sells $6 billion in private equity shares, and such secondary market bulk transactions also mean that a continuous trading market is taking shape, and the buyer may be specialized secondary funds, sovereign wealth funds, etc.This is similar to stablecoins: Stablecoins provide 24/7 liquidity to global funds, and now the VC industry is also trying to provide a “continuous market” experience for startup equity using secondary market and direct share transfers.

It can be said that this reflects a mentality change: investors want more flexible and faster liquidity, rather than having to wait for a decade-long fund cycle, which is in line with the culture of the crypto market.Some crypto funds even propose to tokenize venture capital shares or use stablecoins to pay LPs quarterly dividends instead of bank wire transfer fiat currencies.Although this type of trend is still relatively marginal, it also shows that the impact of stablecoin infrastructure on the operation of traditional capital is expanding.

The later “private IPO” and the inspiration of Stripe and Databricks

The seventh reality of Gurley mentioned above: “A super-large round of financing is equivalent to an IPO”, which can also be considered together with the stablecoin ecosystem.In the crypto market, anyone can trade tokens instantly; in venture capital, this means that more and more investors are willing to price liquidity in the secondary market through private financing.For example, in 2023, Stripe completed a US$6.5 billion Series I financing, which was snapped up by major hedge funds and cross-border investors. This was like a non-public IPO, creating a partial exit window for old shareholders.Similarly, Databricks also raised a $500 million round of financing at the end of 2023 to create liquidity that the open market cannot provide.This is an effective “fund escape” channel for VCs and LPs, and it also echoes the stablecoins bring liquidity to the digital dollar market.

Admittedly, these large amounts of private financing are still through bilateral negotiations rather than public listing and matching, and are not completely open and highly liquid transactions like stablecoins.However, with the maturity of tokenization and the maturity of some equity trading platforms (such as Forge, EquityZen), liquidity similar to that of open markets may even appear in the future.This means that the VC industry is also moving closer to crypto market liquidity and instant trading, which lays the groundwork for the future capital market pattern.

Invest in the next “Stripe of Stable Coin”

Finally, it must be pointed out that the relationship between venture capital and stablecoins is not only an intersection on the infrastructure track, but also a competitive and cooperative relationship.As stablecoins challenge the traditional payment revenue model, many payment companies that are venture-held (such as Stripe, Adyen, Wise) must follow up on investment or self-development, which also explains Stripe quickly builds its own stablecoin stack by acquiring Bridge and Privy.At the same time, native crypto companies such as Circle and Coinbase are also using venture capital to promote the implementation of USDC in the context of partial openness. For example, Circle’s investment department also specializes in startups that can promote the popularity of USDC.Therefore, this is a mutually promoting relationship: VC capital promotes stablecoins adoption, and stablecoins may provide tools for VC investment itself (such as using stablecoins as a global investment and dividend channel in the future).

Overall, although the intersection of venture capital and stablecoins is not an obvious direct overlap, it is rapidly increasing.Venture capital is investing funds in enterprises that can be implemented and have an income model in the stablecoin ecosystem, and is also learning from the liquidity characteristics of the crypto market to reconstruct its own exit and liquidity logic.what does that mean?This means that the venture capital industry can no longer ignore this trend: stablecoins and crypto finance have been integrated into the future of commercial payments and capital flows, forward-looking funds are investing in it, working with it, and even using it to simplify operations, and those who stick to the old model may miss a new round of huge returns and efficiency dividends.

Looking to the future: Scenario forecasts for 2025–2026

Given the complex context we described earlier—on one side is the stagnant venture capital industry and on the other side is the fast-moving mainstream stablecoin market—how might the next 18 months evolve?In this last section, we outline three possible scenarios for 2025–2026 and evaluate their impact on super funds, mid-sized venture capital, and stablecoin adoption.

Baseline scenario: “Slow but stable”

Under the benchmark assumption, the current trend continues without severe impact.The IPO market gradually recovered by the end of 2025, but only for high-quality companies (there may be several iconic tech IPOs or direct listing breaking through the freezing point).M&A activity has increased slightly as interest rates stabilize and regulatory guidelines become clearer (for example, the new FTC leadership team may be more willing to allow large tech companies to implement strategic mergers and acquisitions within a limited scope).This means that some “zombie unicorns” can also get exit opportunities, but the valuation is relatively mild – for example, the transaction sale valuation is lower than the latest round of financing of 30%–50%, which is also within the expectations of LP (Limited Partners).In this scenario, super funds slow down their investment pace; they continue to invest in leading AI and fintech companies, but the price requirements are more realistic.We may see some super funds opting to reduce the size of the new phase of the fund and focus on existing portfolio management (in fact, several well-known Sand Hill Road companies have already predicted their new generation of funds will be smaller than their 2020 high).Medium-sized venture capital funds ($200 million to $1 billion) find their position through deeper participation and professional expertise – because funds are still abundant but exit opportunities are scarce, entrepreneurs are looking for investors who can provide tangible help outside of the funds.These medium-sized funds will highlight differentiation through industry expertise (such as life sciences, climate technology or specific regions) and help founders arrange secondary market liquidity, helping entrepreneurs get through longer exit waiting periods.

Stablecoins continue to maintain their upward momentum in this benchmark scenario, but are still subject to existing regulatory progress.The GENIUS Act is expected to become law by the end of 2025, becoming the first federal framework in the United States.Implementation takes time, but major issuers such as Circle and Paxos will follow the new rules and may also have new stablecoins issued by banks.We do not assume that the US Central Bank Digital Currency (CBDC) was implemented during this period, so private stablecoins are still the main force in the market.The use of stablecoins will grow steadily in e-commerce and cross-border payments, especially as Stripe’s integration of Shopify expanded from early testing to a universal service for millions of merchants.While there may be some twists and turns (such as technical failures or hacking thefts of smaller stablecoins), there will be no systemic crashes.Under this benchmark scenario, the market value of stablecoins may grow from about $250 billion to $400 billion by the end of 2026, mainly from the increase in the speed of currency circulation (rather than simply buying and holding for a long time).Many consumers may not even realize that they are trading through stablecoins (like many people don’t know if the backend is AWS or Azure when using an app).

For venture capital, this means a period of low returns but still maintainable.Fund returns will be significantly lower than expected in 2019–2021, while investments in 2023–2025 (at a more reasonable valuation) are expected to deliver solid returns beyond 2027.For LPs, fundraising will be colder – they fulfill their promises but are more picky about new investments, which will lead to marginal managers being eliminated.The direction of stablecoins and crypto financial infrastructure may become the highlight: if several of these companies can achieve success like fintech, they may be IPOs or acquired (such as Circle IPOs are the leading signal).The partnership between traditional finance and stablecoin startups will also be deeper (such as the Visa + Stripe + Bridge model), and there may even be acquisitions of crypto startups by banks and payment giants, providing mid-scale exit channels for these venture-backed companies.Overall, “moving forward slowly” means neither a violent prosperity nor a collapse, but the venture capital market continues to slowly clear out and stablecoins are steadily integrated into the financial system.

Optimistic scenario: “Soft landing and rapid rebound”

In a more optimistic outlook, a number of positive factors are superimposed.Global macro environment improvements – inflation is under control and has not triggered a deep recession, allowing central banks to moderate rate cuts in mid-2026.The decline in capital costs and the increase in risk appetite will reopen the door to IPOs: by the spring of 2026, technology companies will be crowded with listings, including previously trapped unicorns.This batch of listed supply meets investor demand, and iconic success stories (such as the sharp rise after Instacart or Databricks) rekindle market confidence.Mergers and acquisitions have also accelerated again as Big Technology obtains clear permissions (perhaps because antitrust guidelines are clearer), promoting giants to re-large acquisitions of mid-sized companies.In this scenario, super funds quickly capture opportunities: they may even launch a new generation of growth funds, and existing portfolios can achieve long-distanced exits, achieving considerable dividends for LPs.This “soft landing” will partially verify the Superfund’s previous strategies, although it may also allow them to blow up the bubble again without warning.Medium-sized funds also benefit: many quality startups that were originally shelved will find exit opportunities or integrate into late-stage financing on reasonable terms, and LPs will also regain confidence due to the resumption of dividends, and re-investment commitments in 2026.

In terms of stablecoins, this optimistic scenario is based on the release of a new round of mass adoption by regulatory clarity.Assuming not only the GENIUS Act passed but also promotes international coordination (other jurisdictions adopt similar standards to reduce barriers to cross-border use), stablecoins will stride towards mainstream use scenarios.For example, major tech platforms include stablecoins in payment options—imagine Apple Pay or Google Pay that allows users to settle in USDC, or Shopify expands stablecoin payments from pilot to default globalization capabilities.Against the backdrop of soft landing, consumer spending is strong, and even if only a small portion of the funds flow to stablecoin settlement, it is enough to drive a surge in transaction volume.By 2026, the market value of stablecoins may break the $1 trillion mark, especially when institutional funds and tokenized bank deposits also pour into the track.By then, as publicly traded companies, Circle and Coinbase may soar valuations — and may also encourage more crypto companies to follow up on IPOs (in contrast to 2022–2024 hesitation).This optimistic scenario may also see deep integration of stablecoins with traditional banks: for example, large banks issue their own stablecoins for institutional clients, while the market is running smoothly, which will further strengthen the legitimacy of the concept.

In such cases, venture capital investing in fintech and crypto may enjoy a “golden time”.The recognition and real revenue growth of stablecoin in the open market will give birth to multiple unicorn and decameral companies.Perhaps we will witness the rise of a new generation of players – for example, a startup becomes the “stripe in the stablecoin payment field” in a certain region or industry, and will be successfully listed in 2026 with huge transaction volume and sustainable business model, bringing excess returns to risk funds holding their equity.Additionally, as open market dividends drive investors back influx, LPs may re-increase their commitment to venture capital, providing VCs with adequate funding for “dry gunpowder”.Of course, this beautiful scenario also implies risks – the re-inflow of cheap capital inflows may blow up the bubble and drive up startup valuations and cryptocurrency prices, which means venture investors must remain restrained.But in the short term (2025–2026), soft landing means that the venture capital and stablecoin sectors are perfectly in line with market trends, laying a solid foundation for the long-term cooperation between the two.

Stress scenario: “Regulatory shock and market reset”

In the pessimistic setting, the market faces regulatory or macro shocks, and both venture capital and crypto industries have suffered setbacks.On the venture capital side, assuming that inflation is more stubborn, or geopolitical risks lead to a significant risk aversion in the market – interest rates remain high and even climb again, the stock market plummeted by the end of 2025.This will further compress market valuation and may also trigger a real revaluation of the value of the private equity market.Many unicorns have to raise funds at a discount of more than 70% (even closed), and super funds may also make large write-downs on their portfolios and suspend new investments, and even well-known funds have significantly reduced their scale or completely withdrawn from the market (such as the dissolution of a large growth fund or a cross-border investment fund ends its venture capital business).Medium-sized funds are also hard to escape – fundraising is almost stagnant, only the top 10% funds with clear investment logic or past performance can obtain funds, and the rest may be quietly liquidated.

In the stablecoin space, this pressure scenario may involve regulatory regression or reputational shock.For example, the US Congress failed to pass the GENIUS Act, and stablecoin regulation was deadlocked, and even states were in charge of their own efforts to formulate cumbersome rules; or a major stablecoin issuer exposed a reserve management scandal, and was attacked by a cyber-related attack, resulting in fund losses, users panic and sold, and the market value of stablecoin plummeted.For example, global coordination has failed and countries do their own things. The EU or China may ban the use of non-CBDC stablecoins at home, resulting in market fragmentation.This series of events will make merchants hesitate to connect with stablecoins, and early adopters may also retreat due to rising compliance costs.In a more extreme case, regulators set bank-grade capital requirements for stablecoin issuers, seriously limiting their growth, similar to strict regulations imposed on banks, thus completely slowing down the industry.

Market tightening will also affect the crypto industry itself. For example, Circle and Coinbase’s valuations have plummeted, dragging down industry financing and investor confidence, and even entering a cold winter like 2019 (Crypto Winter 2.0). Venture capital is discouraged by the crypto track, and related projects may also be suspended due to hopeless profits or lack of clear prospects.

Of course, even in this pessimistic scene, it is not pitch black.Some people believe that real economic turmoil may make users turn to stablecoins to seek hedge (such as emerging market users choose to avoid depreciation of local currency with US dollar stablecoins), and maintain market demand from the grassroots level.But for venture capitalists, such growth is difficult to translate into foreseeable returns on investment.Therefore, the stress scenario means exiting rare, impairment is widespread, and a high level of vigilance about all risks and regulation that are still uncertain.

Interestingly, such stress tests may catalyze what Gurley calls a fundamental clearance: the bubble burst forces the industry to reorganize, and the poor-quality projects are out, clearing the obstacles for the next round of recovery.The stablecoin industry may also accelerate the implementation of central bank digital currency (CBDC) due to regulatory crises, thereby completely changing the market structure.Venture capitalists must also adjust accordingly, rethinking track direction (e.g. to CBDC-based applications) in order to find opportunities under the new rules.

Scenario impact summary:

• In the benchmark scenarioSuper funds are moving forward steadily, medium-sized funds have found space by relying on deep cultivation, and stablecoins have slowly entered the financial ecosystem.

• In an optimistic scenario, market liquidity has recovered, venture capital has been harvested, and stablecoins have quickly entered the mainstream, creating golden opportunities for financial technology innovators and investors.

• In a stressful situation, the industry has been reshuffled, stablecoin adoption has been setbacked, many investments have suffered losses, market rules may be completely rewritten, and only the most stable companies and investors can survive.

For policy makers and investors, these three scenarios have their own implications.Regulators should see that providing a clear framework (such as optimistic scenarios) helps unlock innovation potential, while regulatory uncertainty or excessive restrictions (stress scenarios) may curb new tracks that could have improved economic efficiency.Investors should prepare for the long-term cycle (benchmark scenario), take decisively when the market warms up (optimistic scenario), and also set up response plans for the market to deteriorate again (stress scenario).For example, funds that are raising funds may consider adding flexible authorization to the charter to expand secondary market transactions or token investments based on different market scenarios, ensuring that they can be dealt with calmly regardless of how they evolve in the future.

in conclusion

The intersection of the new reality of venture capital and the rise of stablecoins is reshaping the financing, payment and liquidity landscape in real time.The next 2025 will be a critical moment to test whether Silicon Valley and crypto communities can respond flexibly to these changes.At present, dealing with this situation requires a dual mentality: on the one hand, cautiously acknowledge that the past “national carnival” era was temporarily over; on the other hand, firmly believe that truly transformative opportunities are sprouting in the ruins of old scripts, such as building a truly global stablecoin payment network.An investor once said: “Rational pricing risks and keep the market running” – as long as you do this, innovation and capital can find a balance point again.

The next few years will reveal whether 2025 will become a turning point in a new wave of productivity and financial innovation, or a warning signal, forcing the industry to return to fundamentals.Visionary investors are planning for the former and defending the latter. As venture capital and stablecoins blend at the forefront of technology and finance, an unprecedented complex is taking shape.