Crypto Is Finally Growing Up, Says VC Giant Andreessen Horowitz

The cryptocurrency industry is no longer a niche experiment, but a massive, maturing market on the cusp of widespread adoption, according to Andreessen Horowitz’s State of Crypto 2025 report, which dropped Wednesday.

The 54-page analysis paints an optimistic picture of crypto’s trajectory, emphasizing 2025 as the pivotal year for institutional embrace while highlighting surging user growth, technological advancements, and regulatory progress in the U.S.

“This is the year the world came on-chain,” the authors wrote.

With Bitcoin dominating over half the cryptocurrency market cap and stablecoins rivaling global payment giants like Visa in transaction volume, the report argues that crypto is anchoring the modern economy—yet it warns that challenges like privacy, scalability, and AI integration must be addressed to unlock its full potential.

That optimism isn’t unexpected: Andreessen Horowitz is Silicon Valley’s biggest booster, having raised more than $7.6 billion across four funds earmarked for crypto.

At the heart of the report is the assertion that crypto’s market is “big, global, and growing,” driven by cyclical feedback loops between rising prices, developer activity, and user adoption. The total crypto market capitalization has seen dramatic ups and downs, but recently topped $4 billion for the first time ever.

And underlying metrics show resilience: monthly active developers have climbed to over 40,000, while mobile wallet users approach 60 million. Bitcoin remains king, holding more than 50% of the global crypto market cap and ranking among top global assets—its value now surpasses companies like Meta and Saudi Aramco, though gold’s market cap is still 11 times larger.

The report notes Bitcoin’s increasing correlation with macro forces, behaving at times like a safe haven (similar to gold) and at others like a risk asset (tracking the Nasdaq).

Here come the institutions

In the report, Andreessen Horowitz dubbed 2025 “the year of institutional adoption.” Major financial players are diving in: Circle’s market cap exceeded $50 billion earlier this year after a splashy IPO, Robinhood launched its own Arbitrum-based layer-2 blockchain, BlackRock continued expanding its tokenized money-market fund, and Fidelity started testing its own USD-pegged stablecoin.

Traditional giants like Stripe, Visa, PayPal, Mastercard, Shopify, JPMorgan, and Morgan Stanley are integrating crypto features, from stablecoin payments to tokenized assets. Bitcoin and Ethereum ETFs alone hold over $170 billion in on-chain assets, with BlackRock’s iShares Bitcoin Trust holding over $91 billion worth of BTC as of this writing.

Meanwhile, publicly traded “treasury companies” now hold billions in crypto reserves—led by Bitcoin giant Strategy with $69 million—signaling a shift toward treating digital assets as core balance-sheet items.

Stablecoins emerged as a breakout star, having “gone mainstream” with adjusted transaction volumes hitting $9 trillion over the past year—gaining on ACH ($87 trillion) while dwarfing PayPal ($1.7 trillion).

Tether’s USDT and Circle’s USDC dominate stablecoin supply, primarily on Ethereum and Tron, and stablecoin issuers now rank among the top 20 holders of U.S. Treasuries, ahead of nations like Saudi Arabia and Germany. The report posits that stablecoins could bolster USD dominance amid rising national debt and declining foreign demand for Treasuries, with organic adoption decoupling from speculative trading.

Decentralized finance, or DeFi, is expanding, capturing 25% of spot trading volume as users shift from centralized exchanges (CEXs) to decentralized ones (DEXs). Real-world assets (RWAs) like tokenized Treasuries and corporate bonds have reached $30 billion on-chain, bridging traditional finance. Decentralized physical infrastructure network (DePIN) plays are also gaining steam, with projects like Helium generating revenue through user-owned wireless services.

Meme coins, with over 13 million different tokens launched in the past year, are framed as a symptom of regulatory gaps, while NFTs evolve from speculation to broad collecting on low-fee chains. Prediction markets, buoyed by post-election traction, are “here to stay,” the report claims.

The report claimed that crypto infrastructure is “(almost) ready for prime time,” processing over 3,400 transactions per second—approaching scales of Nasdaq or credit card networks. Solana stands out as a hub for economic activity, with rising throughput and billions in app revenue, while Ethereum’s layer-2 upgrades have driven record volumes at all-time-low fees.

Bridges are funneling billions to more robust chains, and zero-knowledge (ZK) proofs are accelerating privacy and scaling. Blockchains are also preparing for quantum threats, with 6.65 million Bitcoin ($717 billion) still at risk from vulnerable addresses.

AI and crypto

A key convergence is between AI and crypto, with the report arguing that crypto can solve AI’s pain points: proving human uniqueness (over 17 million verified on World), enabling agent payments ($30 trillion projected AI-influenced purchases by 2030), tracking IP provenance ($80 trillion in intangible assets), and decentralizing compute (over 420,000 models on Gensyn’s network).

Since ChatGPT’s launch, crypto has seen a talent exodus to AI but net gains from other sectors, fueling a wave of “AI x crypto” startups—now representing 30% of crypto VC deals. AI’s power consolidation in Big Tech underscores the need for crypto’s decentralization.

In America, the industry is “stronger than ever,” the firm wrote, thanks to advancing legislation like the GENIUS Act—which President Trump signed into law in July with bipartisan support—and the pending CLARITY Act. Federal agencies are being proactive, too: the DOJ revised crypto prosecution policies, the CFTC clarified that code isn’t a crime, and the SEC issued guidance on stablecoins and ETFs.

This environment enables tokens to capture revenue directly for holders, the report suggests, closing economic loops with $33 billion in user-paid fees generating $18 billion for projects and $4 billion accruing to tokens.

Looking ahead, Andreessen Horowitz forecasts market structure as top policy priority, accelerated stablecoin use strengthening USD, traditional finance doubling down on-chain, infrastructure breakthroughs, and revenue-generating tokens. It also projects AI-crypto innovations addressing internet challenges, a surge in tokenized real-world assets, clearer regulations unlocking developer opportunities, and consumer products onboarding the next wave of users.