Author: insights4.vc Translation: Shan Ouba, Golden Finance
Over the past decade, large funds have expanded rapidly, but a group of "zombie unicorns" (startups with valuations of more than $1 billion but lack clear exit prospects) and a long-term sluggish IPO/M&A market have made portfolios illiquid. Limited partners (LPs) face a liquidity crunch, as evidenced by the billions of dollars in secondary market share sold by universities such as Harvard and Yale. At the same time, hype in the field of generative AI has attracted a large influx of capital, delaying a full market adjustment. Bill Gurley warned that the liquidity cycle in the private equity market is being stretched to an unprecedented length, with private equity giants replacing public listings with pre-booked transactions (such as Stripe's large-scale private financing), and companies are delaying or even abandoning IPOs.
Meanwhile, stablecoins are leaping from a niche tool for cryptocurrencies to a mainstream fintech driver in 2025. USDC and USDT, which are dollar-pegged tokens, now have a circulation of more than $250 billion, with a trading volume of about $30 trillion last year. However, the identities of stablecoin users and usage scenarios remain highly opaque - Artemis research points out that it is very difficult to track stablecoin usage due to multi-chain fragmentation and pseudo-anonymous addresses. Despite limited data, the core potential of stablecoins is unquestionable: they can radically simplify the traditional payment value chain. Fintech analysts believe that stablecoins allow any business to bypass card organizations and banking networks and transfer value directly in a ledger transfer model. This paradigm shift may give birth to the first trillion-dollar fintech giant. This has also attracted the attention of regulators: In June 2025, the U.S. Senate passed the bipartisan GENIUS Act, the first major stablecoin bill, which requires issuers to hold 100% of reserves and disclose them monthly, and explicitly restricts large technology companies from issuing stablecoins. This legislative momentum and Circle's impressive performance after its IPO (its stock price has increased about 6 times since its IPO) means that regulated stablecoins are becoming a new "funding channel" for Internet finance, not just in the crypto space.
This report explores the intersection of venture capital and stablecoins in the current market. We will analyze Gurley’s pessimistic outlook for VC liquidity in 2025 (Section 1) and the rise of stablecoins as a disruptive force in the payment industry (Section 2); then we will delve into Stripe’s crypto strategy case study for 2025, including the acquisition of Privy and Shopify’s stablecoin integration, as well as Coinbase’s new merchant payment service (Section 3); Section 4 will analyze the intersection between the two - from venture capital funds flowing into crypto payment infrastructure (compared to the weakening of investment in new public chains), to the trend of large secondary markets and cross-round financing that echo the instant transfer characteristics of stablecoins; finally, we will look forward to several scenarios for 2025-26 (Section 5), including baseline scenarios, optimistic scenarios, and stress scenarios. The core conclusion is that venture capitalists must adapt to the new reality of longer liquidity cycles and market fragmentation, and the maturity of stablecoins will completely change the financing, capital utilization and revenue models of startups. These trends have far-reaching impacts - from Silicon Valley Sand Hill Road to Capitol Hill.
Bill Gurley on the Opportunities and Costs of Going Private
Bill Gurley recently summarized seven “market realities” that will impact the venture capital industry in 2025. These interrelated factors provide a clear framework for the challenges facing investors and entrepreneurs, as follows:
The Age of Mega Funds: The amount of funds at the top VCs has expanded dramatically. Funds that used to focus on early-stage investments of $500 million now raise billions of dollars and place large bets at all stages. Hedge funds such as Coatue and Altimeter have also poured into late-stage financing, and giants such as SoftBank Vision Fund have made generous investments. The result is a surge in funding, pushing up valuations and expectations, and increasing the risk of corporate overcapitalization. Some one-year-old startups can also get $300 million in financing, which is nominally "late-stage" but is actually a rare super-large check. This trend is redefining the industry landscape and also means greater risk of capital misallocation.
"Zombie Unicorns" Accumulation: The boom of giant funds has spawned a large number of unicorn companies with overvalued and uncertain prospects. In recent years, about 1,000 VC-backed companies have joined the $1 billion club, with a total financing amount of about $300 billion. But many of these companies were raised at extremely high price-to-sales multiples during the 2020-21 bull market, and now their growth has slowed down and their valuations are difficult to reproduce the glory of the past. Many companies have hundreds of millions of dollars in cash on their accounts, which can barely survive or even barely make a profit, but they can no longer grow a business volume that can match their high valuations. Gurley calls them "zombies", meaning they are stuck in the past, neither dead nor alive, and LP funds are therefore locked up for a long time.
Incentive mismatch and deadlock: These distorted incentive mechanisms have delayed the market's "rebalancing". Capital was flooded during the zero interest rate period, driving valuations up; after interest rates rose and the market fell, it was normal to see large-scale round reductions or liquidations. However, many startups chose to tighten their belts to extend the life of funds and avoid financing at low prices, thus delaying value revaluation. Adding terms such as liquidation priority, mergers and acquisitions or sales are unprofitable, and this vicious cycle freezes the market.
Exit desert: IPO and M&A exhaustion: The exit channel is almost closed. Gurley emphasized that even if the Nasdaq index rose by 30%, few VCs would support companies to go public, and almost no large-scale mergers and acquisitions would be implemented. This is partly because of the complex antitrust environment and acquisition process (for example, a $300 million acquisition may also be delayed for a year), and partly because the cost of public listing and the burden of disclosure are too high, resulting in the long-term existence of "exit deserts" and the funds can only be stranded on the books.
LP liquidity crunch: Limited partners who over-allocated illiquid assets during the economic boom are about to face a debt crisis. Limited partners such as endowment funds and pension funds are facing a shortage of funds due to the sharp decline in returns from venture capital and private equity funds. In the first quarter of 2025, American universities issued $12 billion in new debt, the third highest in history, mainly to make up for operating budgets that were covered by endowment fund income in the past. Some top universities are now actually borrowing money to meet capital needs. More strikingly, both Harvard University and Yale University announced plans in the first half of 2025 to sell large parts of their private equity portfolios (about $1 billion and $6 billion, respectively) on the secondary market. Yale’s move is particularly notable: As a pioneer of the endowment model, Yale is abandoning the illiquid strategy it once championed. Gurley sees this as a sea change—if the most influential limited partners start to reduce their investments, it indicates that the venture capital overhang of the past decade is no longer sustainable. What this means: New venture capital fund raisings may face more skeptical (or cash-strapped) limited partners, some of whom will trade at a discount in the secondary market, resulting in losses. This dynamic forces venture capital firms to find liquidity solutions for their portfolios lest limited partner support weakens.
“Going Private is Going Public”: One of the ironies of the closing IPO window is that many successful startups no longer need IPOs as much as they once did. Ample private capital means that later-stage companies can raise huge rounds to fund growth or provide liquidity to employees while remaining private indefinitely. Gurley quipped that in today’s environment, it is more attractive for many growing companies to be private than to go public. If you still have access to cash, it’s attractive to avoid the compliance burdens of the public markets and the scrutiny of quarterly earnings. We’ve seen the rise of private secondary markets and tender offers that provide some liquidity to early investors without going public. In addition, new entrants like Thrive Capital have created a “bookings only” market for pre-IPO giants. Stripe, one of the most notable private decacorns, orchestrated a $6.5 billion round in 2023 that amounted to a private IPO, allowing employees to sell shares while bringing in large investors who might have otherwise bought in at the IPO. Such transactions suggest that a quasi-public market is operating on a bookings basis, with select late-stage funds holding large stakes (10-30%) rather than publicly floated shares. This trend has siphoned off returns traditionally earned by public market investors and challenged the venture capital model: VCs may hold on to their profitable projects longer in these super-large private rounds, or even cash out partially. All in all, the traditional venture timeline (roughly 8 years from Series A to IPO) has been distorted; companies may remain private for more than 12-15 years under temporary liquidity mechanisms that operate privately.
AI fever delays market clearing: The final reality: Just as the venture market cools in 2022-23, a new hype cycle arrives - generative AI. In late 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 sentiment shifted again from fear to fear of missing out (FOMO), this time all about AI. Investors who had previously been pulling back suddenly piled into AI startups, which were valued 10 to 20 times higher than normal. This influx of money, including non-traditional capital from sources like Middle Eastern sovereign funds, effectively crowded in new money and propped up the VC market at a time of a healthy pullback. While excitement about the technology was justified, the timing meant the VC ecosystem never quite “reset” all valuations. Many non-AI companies benefited indirectly—this rising tide boosted funding sentiment generally in early 2024. Gurley’s point is not that AI itself is overhyped, but that it has delayed the day of reckoning for traditional unicorns that have become overvalued. For venture investors, this means navigating two conflicting currents: either invest in AI and risk missing out, or a backlog of overvalued portfolio companies that still need exits or price cuts. Gurley’s warning to peers and founders is clear—don’t mistake this AI-driven respite for a return to 2021 conditions. Liquidity is still hard to come by and needs to be carefully screened.
The venture capital industry in 2025 is full of delayed consequences. Cheap money and excessive enthusiasm have spawned too many unicorns and too few exits, resulting in a long and bloody process instead of a sharp crash. Gurley's message is that patience is crucial - funds may need to extend the investment life cycle, carefully manage reserves, and GPs should also communicate to LPs in advance that paper returns will be bleak for a long time until the actual exit is realized. Visionary funds are exploring new liquidity channels (such as secondary market sales and structured transactions) to adapt to the new normal. Overall, venture capital is experiencing a severe test that has not been seen since the bursting of the Internet bubble. The difference this time is that the scale of the private equity market has become 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 are beginning to turn their attention to tracks that have the potential to generate revenue in the shorter term, and one of them is the field of financial infrastructure. Stablecoins and the emerging crypto business ecosystem are one such trend, which promise not only growth but also, at least in terms of money moving, faster liquidity. In Part Two, we’ll enter the parallel world of stablecoins: a rapidly evolving market that is solving some problems (like slow, costly payments) in a different way, while the venture capital industry is grappling with others (like slow, hard-to-get exits).
While venture capitalists are regrouping, the stablecoin race is galloping, with a far greater scale and legitimacy in 2025 than anyone expected just a few years ago. Stablecoins — digital tokens pegged to fiat currencies (primarily the U.S. dollar) — have become the “talking point” in fintech circles. There are new developments almost every week: Stripe enables stablecoin payments, PayPal launches its own stablecoin on a new public blockchain, the US Congress pushes for new legislation... The second part of this article will focus on the current state of the stablecoin market on June 20, 2025, including: (a) data and usage trends, (b) the disruptive potential of stablecoins in the payment field, and (c) the regulatory watershed moment that is playing out in the United States.
Adoption is growing rapidly, but the data is still fuzzy
By mid-2025, the total market value of US dollar-backed stablecoins has exceeded $220 billion, which is roughly equivalent to the combined market value of the top 20 banks in the United States. The market is currently dominated by two giants, Tether (USDT) and Circle's USD Coin (USDC), each with a circulation of approximately $60 billion to $100 billion, and others such as PayPal's PYUSD and various fintech or DeFi tokens also occupy a place. The usage is even more astonishing: Coinbase reports that stablecoins will facilitate about $30 trillion in transactions in 2024, three times the previous year. This part of the transaction volume mainly comes from crypto trading and DeFi activities (stablecoins are the standard medium for liquidity pools and lending agreements), but stablecoins are also increasingly entering the real economy and remittance scenarios. Stripe said that global stablecoin payment settlements exceeded $94 billion in the past two years, and monthly payment volume has increased from less than $2 billion to more than $6 billion.
Ironically, although these tokens all run on public and transparent blockchains, the analysis of stablecoin usage is more complicated. A recent study by Artemis pointed out that because the data is scattered among dozens of blockchains and second-layer networks, analysis has become extremely fragmented. USDC has been deployed in networks such as Ethereum, Solana, Polygon, Stellar, Base, and each network has its own data structure and characteristics, which means that tracking the overall usage of a stablecoin requires integrating multiple sources. Artemis joked that we are experiencing a blockchain version of the "early PC era" - "each major network speaks a different language." For example, analyzing the flow of funds for PayPal PYUSD 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 this stablecoin, and for what purpose?" The on-chain address is just anonymous characters, lacking off-chain background such as exchange annotations and merchant wallet information, resulting in "a certain $100 transaction" being almost the same as another. Artemis refutes the myth that "blockchain data is completely transparent" - in fact, understanding the flow of stablecoin funds requires a lot of data enhancement and assumptions. Therefore, while market capitalization and transaction volume data are eye-catching, granular information (such as retail and institutional ratios, domestic and cross-border use, etc.) will still appear fuzzy in 2025. This is also one of the reasons why regulators are cautious - it is difficult to regulate something that you cannot clearly measure.
Although visibility is not perfect, several qualitative usage trends are already evident: stablecoins are widely used in (i) cross-border payments and remittances (especially in emerging markets where USD is difficult to obtain, such as Argentina and Nigeria, where stablecoins provide digital USD liquidity without the need for a US bank account); (ii) crypto trading and DeFi (stablecoins are a gateway and safe haven for volatile markets, with billions of transactions per day in liquidity pools and lending protocols); (iii) e-commerce and merchant payments (an emerging scenario in 2025, such as Shopify opening USDC settlement); and (iv) corporate funds and fintech applications (Stripe launched a stablecoin account service for enterprises, allowing enterprises to manage stablecoins such as USDC like fiat currencies, especially for those operating across borders or in volatile currency markets, which means the stability of the US dollar and the instant settlement speed of crypto). These widespread use cases highlight why stablecoin supply remains at historically high levels after the 2022 crypto bear market: they meet the fundamental need for a high-speed programmable dollar.
Payment Disruption: Bypassing the Traditional Payment System
In April 2025, Rob Hadick provocatively argued that stablecoins herald the “collapse of the traditional payment model.” His point: stablecoins are not just a fintech fad or an add-on to existing payment networks, but a new end-to-end payment architecture that can replace the old-fashioned payment network cobbled together by banks and processors. Today’s bank card payment model involves a bunch of intermediaries—issuing banks, acquiring banks, card organizations, payment processors, gateways, etc.—each of which takes a portion of the fees. Merchants may have to wait for days for settlement and lose 2–3% in fees. Stablecoin payments are different. They can be settled peer-to-peer on the blockchain in just minutes and a few cents, without the need for intermediaries. If merchants and consumers use the same stablecoin (such as USDC), then payments are essentially ledger updates—as Hadick said, “everything is a ledger transfer.” This will radically simplify the value chain: many old middlemen and their fees can be completely bypassed.
The key is that stablecoins allow non-bank and technology companies to operate payment systems at scale. A startup can become its own "payment network" simply by integrating a stablecoin wallet into its application, which was almost impossible to achieve without a banking license or cooperation with a payment processor in the bank card era. We have already seen a wave of new companies with this concept at its core: stablecoin-based payroll fintechs, remittance companies that use stablecoins for currency arbitrage, and merchants that begin to accept stablecoins as a form of payment on their networks. Hadick predicts that the first trillion-dollar fintech company will be the one that fully embraces stablecoins and redefines payments. Although it has not yet been realized, industry giants are also beginning to pay attention to this trend: Visa's CEO called stablecoins a "promising" innovation that can achieve 24/7 settlement, and has launched a pilot for cross-border settlement with USDC. Similarly, Mastercard has also signed a cooperation agreement in 2025 to enable stablecoin payments on its network for consumers and merchants. In short, this theory of disruption holds that stablecoins can digitize and disintermediate the payment industry, just as VoIP did for telecommunications, reducing costs to almost zero. Moreover, stablecoins are programmable: payments can be smart contracts, which makes new business models (such as micro-charges per API call, automatic release of funds upon delivery, etc.) easier to implement than traditional systems.
Hadick's views are not just talk, and real signals can be seen everywhere: PayPal launched its own US dollar stablecoin (PYUSD) in 2023, and announced in 2025 that it would natively integrate the coin on multiple blockchains (Ethereum and Stellar); Stripe's business direction is also in line with the view that stablecoins are regarded as new payment tracks; and the 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 a "natural" solution for Internet commerce-for global platforms, getting rid of the constraints of national banking systems in exchange for an interoperable US dollar token will undoubtedly reduce the burden. Of course, challenges remain (volatility has been addressed, but issues such as returns, fraud, and compliance require new solutions in the stablecoin system), but the momentum is clearly building.
Regulation and the GENIUS Act
A major development in mid-2025 is that policymakers have finally provided clear rules for stablecoins. On June 18, the U.S. Senate passed the Government Electronic National Institutional Stablecoin Unit Act (GENIUS Act) - the first comprehensive stablecoin legislation in the United States. The bill passed with rare bipartisanship (68 to 30) and is expected to be approved by the House of Representatives in late summer. The core provisions of the bill include: (a) requiring any payment stablecoin issuer to hold 100% of highly liquid asset reserves (such as cash, treasury bills, etc.) and disclose the reserves publicly on a monthly basis; (b) restricting the right of issuance to regulated entities and explicitly prohibiting large technology companies from issuing stablecoins on their own; (c) defining clear redemption rights; (d) giving the U.S. Treasury or the Federal Reserve corresponding regulatory powers. The market reacted quickly: the newly listed shares of USDC issuer Circle soared, and Coinbase's stock price also jumped. Analysts say that stablecoins are expected to evolve from "cryptocurrency money rails" to "internet money rails." The passage of the bill means that Washington will not ban or curb US dollar stablecoins, but choose to include them in the scope of regulation, which not only gives legitimacy to the industry, 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 coexistence of central bank digital currencies and private stablecoins. In the United States, another impact of the GENIUS Act is the rekindling of corporate interest: several large financial institutions are exploring issuing their own stablecoins or tokenized deposits, and a large bank alliance is also launching a "deposit-backed stablecoin" pilot project in early 2025. The line between crypto and traditional payments is blurring rapidly.
In summary, by mid-2025, stablecoins are at a critical breakthrough: mainstream technology and financial giants are integrating and using them on a large scale, users are transferring tens of trillions of dollars through stablecoins, and regulation is standardizing their role in the financial system. The remaining challenges - data transparency, anti-money laundering/real-name compliance, and user experience technology issues - are significant but are being actively addressed. Stablecoins are expected to move from the margins to ubiquity in the next few years, just as digital wallets and emerging banks have developed over the past decade. So what does this mean for investors and policymakers? Stablecoins are both an opportunity and a strategic variable: they can reduce costs and expand financial access, but they may also redistribute profit pools and require updated regulatory systems. For venture capital, stablecoins are not only a new investment track, but also a tool that makes capital management and circulation more efficient, thereby improving all aspects of the use of funds in the entrepreneurial ecosystem.
In 2025, no company can perfectly interpret the intersection of venture-backed giant fintech and stablecoins like Stripe. Once just a traditional online payment processor, Stripe has decisively turned to crypto and stablecoin infrastructure in 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 Crypto Reboot
Stripe was involved in Bitcoin payments as early as 2014, but abandoned the attempt in 2018 due to low market demand and high fees. For many years, Stripe has been outside the crypto circle. However, at the end of 2024, Stripe CEO Patrick Collison announced that the company aims to "build the best stablecoin infrastructure in the world", marking a strategic shift. They quietly began to piece together various modules, trying to make stablecoins a core part of the platform. In October 2024, Stripe acquired a startup called Bridge (the founder of Bridge was also a Stripe member) for a huge sum of US$1.1 billion. Bridge is positioned as a "stablecoin orchestration" platform, which is essentially a middle layer that helps companies easily integrate stablecoin payment, custody and exchange services. The technology developed by Bridge can connect stablecoins to the fiat currency card network. For example, it cooperates with Visa to enable fintech applications to issue Visa cards directly with users' stablecoin balances. In February 2025, Stripe completed the acquisition of Bridge and incorporated the team into its newly established crypto department. The integration effect soon became effective: in May 2025, Stripe launched Stablecoin Financial Accounts using Bridge technology, helping companies in more than 100 countries hold funds in stablecoins (initially supporting USDC and Stripe's self-issued USDB) and smoothly use these stablecoins for payment and settlement. This is equivalent to expanding Stripe's existing core payment services that only handle fiat currencies to the digital dollar field, with Stripe assuming the complexity of encryption in the background.
Privy Acquisition (June 2025)
To complement Bridge, Stripe announced on June 11, 2025 the acquisition of Privy, a startup focused on crypto wallet interfaces. Privy specifically provides developers with an embedded wallet API, helping any application create and manage blockchain wallets for users without having to master the details of encryption. Before Privy was acquired, it had supported more than 75 million accounts for fintech and Web3 applications, and received $15 million in financing from top investors such as Sequoia, Coinbase Ventures, and Ribbit in March 2025, which also shows that the investment circle has confidence in this "water-selling" crypto infrastructure. Although Privy's acquisition price has not been made public, its strategic value is comparable to Bridge. Why did Stripe take a fancy to Privy? Because Privy fills in 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 hope to "blur the boundaries between crypto and fiat currencies to almost disappear." With Privy, Stripe can provide user wallet opening, key management, on-chain operations and other services to any online merchant through a simple API.
It is worth noting that Stripe currently allows Privy to continue to operate as an independent product. This also continues the model of Bridge - integrating its technology and providing services separately to the outside world. This two-track strategy helps Stripe build itself into a one-stop crypto service platform: developers can use Stripe for credit card payments and manage stablecoins and wallets through it.
Provide stablecoin payments for Shopify and other platforms
Stripe's crypto integration results have been quickly implemented: In June 2025, Stripe announced a major collaboration with Shopify to connect USDC payments to millions of merchants. This collaboration allows Shopify's merchants in 34 countries to directly accept USDC, a US dollar stablecoin, at checkout, with Stripe responsible for payment processing. Buyers can pay using Base (Coinbase's second-layer network) and any compatible wallet. Stripe provides merchants with two options in the background: one is to automatically convert USDC into the merchant's local fiat currency (such as euros or Indian rupees) and settle directly into the merchant's bank account; the other is to deposit USDC directly into the wallet of the merchant's choice. All this requires almost no additional operation by the merchant, just switch the function in the Stripe console. Shopify COO commented: "Stripe has always helped us handle the most difficult part of payment, and now it has done this for stablecoin payments," and emphasized that merchants can seamlessly access this "booming global demand for crypto payments" without having to compete with exchanges and volatility risks.
For Stripe, this integration is an important means of competitive differentiation. Stripe can now reach users who prefer to pay with cryptocurrencies, including a large number of Web3 native users and overseas buyers, which is also attractive to merchants who want to reduce exchange and card organization fees. For example, Argentinian users can pay US merchants with USDC, avoiding exchange rate and card fees. Given Shopify’s large merchant base, this means that stablecoins are quickly becoming a new force to be reckoned with in e-commerce payments, rather than a fringe pilot.
End-to-End Stack Synergy
By combining these components—Bridge’s payment rails, Privy’s wallets, and Stripe’s existing merchant network—Stripe has essentially built a complete end-to-end stablecoin payment stack. Imagine a scenario where users on a marketplace can hold a USDC balance (Stripe/Privy manages wallet keys behind the scenes), spend the money offline with a Visa card (via the Bridge–Visa integration), and check out at a Shopify store (via the new Stripe checkout process), while merchants receive stablecoins and can choose to keep the crypto assets or convert them to fiat currency instantly. The whole process meets regulatory and risk standards, and Stripe is responsible for the user experience. This also means that Stripe is positioning itself as the "AWS of the crypto world" - providing developers and merchants with a complete set of tools so that they can seamlessly operate the flow of funds without having to understand blockchain or deal with multiple intermediaries.
It must be mentioned that Stripe's timing is very clever. When they restarted their crypto business, regulations became clearer (the US Treasury Secretary even predicted that the stablecoin market size could reach $2 trillion by 2028), and real-life partnerships such as Shopify emerged. Stripe has always been known for its huge market ambitions (in order to maintain innovation, they even deliberately postponed their IPO), and these actions ensure that it can stand at the forefront of payment innovation. For venture investors, this is also a case of mature unicorns gaining growth by entering emerging fields (Stripe is valued at about $50 billion in the secondary market), and it is incorporating tracks that were once considered "risk frontiers" into its growth flywheel.
Coinbase's Challenge
As the stablecoin payment space heats up, not only are established fintech giants like Stripe and PayPal joining in, but native crypto companies are also taking action. Just one week after Stripe announced its partnership with Shopify, Coinbase released "Coinbase Payments" on June 18, 2025, aiming to tap into the global merchant payment market with its own advantages (such as Ethereum's second-layer network Base and a large user base). The solution they described has also been launched in conjunction with Shopify, which means that Coinbase is likely to participate in the same stablecoin integration as Shopify, but provide services to merchants who prefer Coinbase as a payment service provider. Coinbase's 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, with Coinbase paying for Gas to achieve a "zero Gas" experience for users), an e-commerce engine (providing merchants with APIs for processing refunds, reconciliations, etc., similar to Stripe Connect), and a Payment Protocol (supporting advanced on-chain functions such as delayed deductions and dispute handling through smart contracts). In other words, Coinbase is 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 battle for stablecoin payments may be similar to the existing business models of the two: Stripe is aimed at mainstream merchants who value ease of use and integration with existing payment architectures, while Coinbase focuses on crypto-native users and the ability to deeply integrate the Base network ecosystem. Interestingly, the market is large enough that there is room for both directions - after all, Shopify hopes to work with more service providers to drive merchant payment growth. The real competition may be who can better capture the profits and user minds of this new payment track. At present, both have received positive market feedback: Coinbase Payments' stock price rose after its release, and USDC issuer Circle also soared, reflecting investors' optimistic expectations for the increase in the circulation and use of stablecoins, which directly affects Circle's revenue (through reserve interest income) and Coinbase's transaction fees.
Shopify, Coinbase and traditional giants
Shopify has become a key node connecting old e-commerce and emerging stablecoin networks here. This is not accidental-Shopify's total merchandise transaction volume in 2024 is about 200 billion US dollars. It is almost "default support" for its own platform Another set of payment channels parallel to Visa/Mastercard. Shopify CEO Tobi Lütke has always been an advocate of cryptocurrencies (and has long held BTC and ETH). If the USDC pilot shows even small results (such as improving checkout conversion rates in markets with low credit card penetration, or reducing payment fees), then it is foreseeable that Shopify will promote it on a larger scale, and even encourage more e-commerce giants (such as WooCommerce, Amazon, Walmart, etc.) to follow up so as not to fall behind.
It’s still early days, but the integrated picture (Stripe, Coinbase, Circle, Visa, etc.) is pushing stablecoins toward everyday business scenarios, not just within the crypto circle.
Conclusion
The Stripe-Privy case also clearly shows how large, well-funded private giants can build a complete technology stack to seize emerging opportunities through mergers and acquisitions. Stripe uses venture capital-grade capital and shares in exchange for control of startups such as Bridge and Privy, helping them quickly integrate capabilities that would otherwise take years of independent research and development, and ultimately bringing a complete stablecoin payment ecosystem under its wing. For the industry, this also means that fintech and crypto are merging, and the platforms that provide the smoothest and most secure experience for developers and merchants will win the stablecoin payment track in the future. Stripe has a significant first-mover advantage in user experience and distribution capabilities, while Coinbase can demonstrate its strength in innovation speed with its crypto expertise and Base network ecosystem. In the next year, this stablecoin payment race will undoubtedly enter a fast-paced, high-intensity iteration phase.
At first glance, venture capital financing and stablecoins seem to be two unrelated fields: the former is about how startups get funding, and the latter is about how payments are processed. But by 2025, the two are becoming increasingly connected. This section will explore two major intersections: (a) how venture capital is flowing into stablecoins and crypto payments (vs. other crypto niches), and (b) how venture capital broad liquidity and funding dynamics are taking inspiration from the global liquidity that is always available in stablecoins. VC investment shift: from hype to crypto infrastructure After the speculative boom in 2018 and 2021, venture capitalists have become more selective about crypto. The collapse of many tokens and exchanges in 2022-23 has cooled the market. The new wave of enthusiasm for crypto in 2025 is mainly focused on infrastructure that can be implemented and has practical uses, and stablecoin-related startups are the typical representatives. Rather than investing in yet another new layer-1 public chain or a meme coin, VCs are more willing to invest in companies that provide "picks and shovels" for the digital dollar economy. Privy (see Section 3) is an example: it is a B2B crypto infrastructure company that has no token issuance and no speculation, but has attracted first-tier investors such as Ribbit, Sequoia, and Coinbase, and was finally acquired by Stripe on favorable terms. Similarly, stablecoin compliance tools, wallet integration API platforms, and stablecoin-based cross-border payment service providers can also get funding and have healthy valuations, which is in contrast to those pure hype crypto projects.
According to PitchBook data, venture capital financing for crypto/blockchain infrastructure (including payments, custody, development tools, etc.) in the first half of 2025 is much more robust than 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 and help mainstream enterprises adopt crypto assets (such as stablecoins, tokenized physical assets, etc.).
One reason for this is that these infrastructure startups often have real revenue, or at least a clear business model (such as SaaS or transaction fees), which is very consistent with the investment preferences after 2022: from blindly pursuing growth to pursuing actual sustainable business models. Another reason is strategic considerations: many traditional fintech investors now see stablecoins as the core of the future of fintech, rather than treating them as fringe experiments. Therefore, investors who may have shied away from them before are now willing to lead financing rounds for stablecoin payment gateways, on-chain foreign exchange platforms, etc. This is similar to the trend after the Internet bubble: investors turned from websites to investing in underlying services such as cloud computing, and they were very successful a few years later. 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 amounts of money in 2021 (such as Andreessen Horowitz's multi-billion-dollar crypto funds) have also had to adjust their strategies. Because token investments are illiquid and risky, these funds are now more frequently investing in equity, such as Circle (now listed), Ledger, Fireblocks and other infrastructure companies. Circle's listing in New York in June 2025 is a feast of VC liquidity: after the SPAC plan was aborted in 2022, this IPO gave long-term supporters (such as Goldman Sachs, DCG, etc.) the opportunity to cash out, and also established a comparable object for stablecoin companies in the public market. Circle's market value after listing was about $44 billion (at that time, USDC circulation was about $61 billion), providing a reference standard for other stablecoin startups to raise funds, 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 the pursuit of liquidity. As mentioned in Section 1, limited partners (LPs) and VCs are seeking liquidity through the secondary market, which echoes the characteristics of the crypto market that can be bought and sold at any time. For example, Yale University sold $6 billion in private equity shares. Such secondary market block transactions also mean that a continuous trading market is taking shape, and the buyers may be specialized secondary funds, sovereign wealth funds, etc. This is similar to stablecoins: stablecoins provide 24/7 liquidity for global funds, and now the VC industry is also trying to provide a "continuous market" experience for entrepreneurial equity with secondary markets and direct share transfers.
It can be said that this reflects a change in mentality: 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 have even proposed tokenizing venture capital shares, or using stablecoins to pay LPs quarterly dividends instead of bank wire transfers of fiat currency. Although such trends are still relatively marginal, they also show that the impact of stablecoin infrastructure on traditional capital operations is expanding.
Late-stage "Private Equity IPO" and the enlightenment of Stripe and Databricks
The seventh reality mentioned by Gurley in the previous article: "Super-large rounds of financing are equivalent to IPOs" 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 $6.5 billion Series I financing, which was snapped up by major hedge funds and cross-border investors. This is like a private IPO, creating a partial exit window for old shareholders. Similarly, Databricks also used a round of $500 million in financing at the end of 2023, which is equivalent to creating liquidity that the public market cannot provide. This is an effective "capital flight" channel for VCs and LPs, and it also echoes the fact that stablecoins bring liquidity to the digital dollar market.
Admittedly, these large private financings are still through bilateral negotiations rather than public listings, and are not fully open and highly liquid transactions like stablecoins. However, with the maturity of tokenization and some equity trading platforms (such as Forge and EquityZen), liquidity similar to that of the public market may even appear in the future. This means that the VC industry is also moving towards the liquidity and instant transactions of the crypto market, which lays the groundwork for the future form of the capital market.
Invest in the next "stablecoin version of Stripe"
Finally, it must be pointed out that venture capital and stablecoins are not only an intersection in the infrastructure track, but also a competitive relationship. As stablecoins challenge traditional payment revenue models, many venture-backed payment companies (such as Stripe, Adyen, and Wise) must follow up with investments or self-development in this direction, which also explains Stripe's rapid construction of its own stablecoin stack through the acquisition of 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 a partially public context. For example, Circle's investment department also invests in startups that can promote the popularization of USDC. Therefore, this is a mutually reinforcing relationship: VC capital promotes stablecoin adoption, and stablecoins may provide tools for VC investment itself (for example, using stablecoins as a global investment and dividend channel in the future).
Overall, the intersection between venture capital and stablecoins is not an obvious direct overlap, but it is rapidly increasing. Venture capital is investing funds in companies that can land and have revenue models in the stablecoin ecosystem, while also drawing on the liquidity characteristics of the crypto market to reconstruct its own exit and liquidity logic. What does this mean? This means that the venture capital industry can no longer ignore this trend: stablecoins and crypto finance have been integrated into the future landscape of commercial payments and capital flows. Forward-looking funds are investing in it, working with it, and even using it to simplify operations, while those who stick to the old model may miss out on a new round of huge returns and efficiency dividends.
Given the complex background we described earlier—a stagnant venture capital industry on the one hand and a rapidly mainstream stablecoin market on the other—how might the next 18 months evolve? In this final section, we outline three possible scenarios for 2025–2026 and assess their impact on super funds, mid-sized venture capital, and stablecoin adoption.
Baseline Scenario: “Slow but Steady”
Under the baseline assumption, the current trend continues without a sharp shock. The IPO market gradually picks up by the end of 2025, but only for high-quality companies (there may be a few landmark tech IPOs or direct listings that break the ice). M&A activity increases slightly as interest rates stabilize and regulatory guidance becomes clearer (for example, the new FTC leadership may be more willing to allow big tech companies to implement strategic mergers and acquisitions within a limited scope). This means that some "zombie unicorns" will also get exit opportunities, but valuations will be relatively mild - for example, transaction sales valuations are 30%-50% lower than the most recent round of financing, which is also within the expectations of LPs (limited partners). In this scenario, super funds slow down their investment pace; they continue to invest in AI and fintech leaders, but their price requirements are more realistic. We may see some super funds choose to reduce the size of their new funds and focus on managing existing portfolios (in fact, several well-known Sand Hill Road companies have already announced that the size of their new generation funds will be smaller than the highs of 2020). Mid-sized VC funds ($200 million–$1 billion) find their niche through deeper engagement and expertise—as capital remains plentiful but exits are scarce, entrepreneurs are looking for investors who can provide tangible help beyond capital. These mid-sized funds will differentiate themselves through industry expertise (such as life sciences, climate tech, or specific regions) and by helping founders arrange secondary market liquidity, helping entrepreneurs through a longer wait for exits.
Stablecoins continue to rise in this baseline scenario, but remain constrained by existing regulatory developments. The GENIUS Act is expected to become law by the end of 2025, becoming the first federal framework in the United States. Implementation will take time, but major issuers such as Circle and Paxos will follow the new rules, and new stablecoins issued by banks may also appear. We do not assume that the US central bank digital currency (CBDC) will be implemented during this period, so private stablecoins will remain the main force in the market. Stablecoin use will grow steadily in e-commerce and cross-border payments, especially as Stripe’s Shopify integration expands from early testing to a general service for millions of merchants. While there may be some setbacks (such as technical glitches or hacks of smaller stablecoins), there will be no systemic collapse. In this baseline scenario, the market value of stablecoins could grow from about $250 billion to $400 billion by the end of 2026, mainly from increased currency velocity (rather than simply buying and holding for the long term). Many consumers may not even realize that they are transacting in stablecoins (just as many people don’t know whether AWS or Azure is behind the scenes when they use an application).
For venture capital, this means a period of low but sustainable returns. Fund returns in 2019–2021 will be significantly lower than expected, while investments in 2023–2025 (at more reasonable valuations) are expected to bring solid returns after 2027. Fundraising will be cold for LPs - they will fulfill their existing commitments but be more picky about new investments, which will lead to the elimination of marginal managers. Stablecoins and crypto financial infrastructure may become bright spots: if several of these companies can achieve the same success as fintech, they may IPO or be acquired (for example, Circle IPO is a leading signal). The cooperation between traditional finance and stablecoin startups will also be more in-depth (such as Visa + Stripe + Bridge model), and there may even be acquisitions of crypto startups by banks and payment giants, providing medium-sized exit channels for these venture-backed companies. Overall, "slow progress" means that there is neither a dramatic boom nor a crash, but that 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, multiple positive factors are superimposed. The global macro environment improves - inflation is under control and has not triggered a deep recession, which allows central banks to moderately cut interest rates in mid-2026. The lower cost of capital and the improvement in risk appetite will reopen the door to IPOs: by spring 2026, a large number of technology companies will go public, including previously trapped unicorns. This batch of IPO supply meets investor demand, and iconic success stories (such as the surge in Instacart or Databricks after their IPOs) rekindle market confidence. Mergers and acquisitions will also accelerate again as big tech obtains clear approvals (perhaps because of clearer antitrust guidelines), promoting giants to once again acquire medium-sized companies in a big way. In this scenario, super funds will quickly seize opportunities: they may even launch a new generation of growth funds, and existing portfolios will also be able to achieve long-delayed exits and realize substantial dividends for LPs. This "soft landing" will partially verify the previous strategies of super funds, although it may also allow them to inflate bubbles again without vigilance. Mid-sized funds will also benefit: many high-quality startups that were previously shelved will find exit opportunities or integrate into later-stage financing with reasonable terms, and LPs will regain confidence due to the resumption of dividends and increase their investment commitments again in 2026.
In terms of stablecoins, this optimistic scenario is based on the fact that regulatory clarity will unleash a new round of large-scale adoption. Assuming that not only the GENIUS Act is passed, but also promotes international coordination (other jurisdictions adopt similar standards to reduce barriers to cross-border use), stablecoins will take a big step towards mainstream use scenarios. For example, major technology platforms will include stablecoins as payment options - imagine Apple Pay or Google Pay allowing users to settle with USDC, or Shopify expanding stablecoin payments from a pilot to a default global function. In the context of a soft landing, consumer spending is strong, and even if only a small portion of funds flow to stablecoin settlement, it will be enough to drive a surge in trading volume. By 2026, the market value of stablecoins may exceed the $1 trillion mark, especially when institutional funds and tokenized bank deposits also pour into this track. By then, as public companies, Circle and Coinbase could see their valuations soar—and perhaps encourage more crypto companies to follow suit with IPOs (in contrast to the hesitation in 2022–2024). This optimistic scenario could also see stablecoins deeply integrated with traditional banks: for example, large banks issuing their own stablecoins for institutional clients, and the market functioning smoothly, which would further strengthen the legitimacy of the concept.
In this case, VCs investing in fintech and crypto could enjoy a "golden time". Public market recognition of stablecoin companies and real revenue growth will give rise to multiple unicorns and decacorns. Perhaps we will witness the rise of a new generation of players—for example, a startup that becomes the "Stripe of stablecoin payments" in a region or industry, and successfully goes public in 2026 with huge transaction volume and a sustainable business model, bringing excess returns to venture funds that hold their equity. In addition, as public market dividends drive investors back in, LPs may increase their commitment to venture capital again, providing VCs with ample financial "dry powder". Of course, this rosy scenario carries risks—the resurgence of cheap capital could inflate bubbles, drive up startup valuations and cryptocurrency prices, and mean venture capitalists must exercise restraint. But in the short term (2025–2026), a soft landing means that the venture capital and stablecoin sectors are perfectly aligned with market trends, laying a solid foundation for long-term cooperation between the two.
Stress Scenario: “Regulatory Shock and Market Reset”
In the pessimistic scenario, the market faces a regulatory or macro shock, and both venture capital and crypto are frustrated. On the venture side, assume that inflation becomes more stubborn or geopolitical risks lead to a significant risk aversion in the market—interest rates remain high or even rise again, and the stock market falls sharply at the end of 2025. This will further compress market valuations and may also trigger a real revaluation of the private equity market. Many unicorns have had to raise funds at a discount of more than 70% (or even close down), super funds may also make large-scale write-downs on their portfolios and suspend new investments, and even well-known funds may significantly reduce their size or completely exit the market (for example, a large growth fund will be dissolved or a cross-border investment fund will end its venture capital business). Mid-sized funds are also not immune - fundraising is almost stagnant, and only the top 10% of funds with clear investment logic or excellent past performance can obtain funds, and the rest may be quietly liquidated.
In the field of stablecoins, this stress scenario may involve regulatory regression or credibility shocks. For example, the US Congress failed to pass the GENIUS Act, and stablecoin regulation was deadlocked, and even states made cumbersome rules on their own; or a large stablecoin issuer broke out a reserve management scandal, suffered a cyber attack and lost funds, and users panicked and sold, and the market value of stablecoins plummeted. For another example, global coordination failed, and each country went its own way. The EU or China may ban the use of non-CBDC stablecoins in its country, resulting in market fragmentation. This series of events will make merchants hesitant to connect to stablecoins, and early adopters may also retreat due to rising compliance costs. In an even more extreme case, regulators set bank-level capital requirements for stablecoin issuers, severely restricting their growth, similar to the strict regulations imposed on banks, thus completely slowing down the industry.
Market tightening will also affect the crypto industry itself. For example, the valuations of Circle and Coinbase have plummeted, dragging down industry financing and investor confidence, and even entering a cold winter like 2019 (Crypto Winter 2.0), where venture capital is deterred from the crypto track, and related projects may also be suspended due to lack of profit or lack of clear prospects.
Of course, even in this pessimistic scenario, it is not all dark. Some people believe that real economic turmoil may cause users to turn to stablecoins for risk aversion (such as users in emerging markets choosing to use US dollar stablecoins to avoid depreciation of their own currencies), maintaining market demand at the grassroots level. But for venture investors, such growth is difficult to translate into foreseeable investment returns. Therefore, the stress scenario means that exits are rare, impairments are common, and a high degree of vigilance is required for all tracks with uncertain risks and regulations.
Interestingly, such stress tests may catalyze the kind of fundamental cleanup that Gurley talked about: the bursting of the bubble forces the industry to reorganize, and inferior projects are eliminated, clearing the way for the next round of recovery. The stablecoin industry may also accelerate the implementation of central bank digital currencies (CBDCs) due to the regulatory crisis, thereby completely changing the market landscape. Venture capitalists must also adjust accordingly and reconsider the direction of the track (for example, turning to CBDC-based applications) in order to find opportunities under the new rules.
Summary of scenario impact:
In the baseline scenario, super funds move forward steadily, medium-sized funds find space by deepening their roots, and stablecoins slowly enter the financial ecosystem.
In the optimistic scenario, market liquidity will recover, venture capital will reap a harvest, and stablecoins will quickly go mainstream, creating golden opportunities for fintech innovators and investors.
In the stress scenario, the industry will be reshuffled, stablecoin adoption will be frustrated, many investments will suffer losses, and market rules may be completely rewritten, with only the most stable companies and investors surviving.
For policymakers and investors, each of these three scenarios has its own implications. Regulators should see that providing a clear framework (such as the optimistic scenario) can help unleash the potential of innovation, while regulatory uncertainty or excessive restrictions (stressed scenario) may curb new tracks that could have improved economic efficiency. Investors should plan ahead: prepare for long-term cycles (baseline scenario), act decisively when the market warms up (optimistic scenario), and also prepare response plans for the market to deteriorate again (stressed scenario). For example, funds that are raising funds may consider adding flexible authorizations to their charters to expand secondary market transactions or token investments based on different market scenarios, ensuring that they can respond calmly to any future evolution.
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 the crypto community can flexibly respond to these changes. At present, dealing with this situation requires a dual mentality: on the one hand, cautiously acknowledging that the era of "national carnival" in the past is temporarily over; on the other hand, firmly believing that truly transformative opportunities are sprouting from the ruins of the old script, such as building a truly global stablecoin payment network. An investor once said: "Price risk reasonably and keep the market running" - as long as this is done, innovation and capital can find a balance again.
The next few years will reveal whether 2025 will be a turning point for a new wave of productivity and financial innovation, or a warning signal that forces the industry to return to fundamentals. Visionary investors are planning for the former while also preparing for the latter. As venture capital and stablecoins blend at the forefront of technology and finance, an unprecedented complex is taking shape.
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