Why A16Z is so powerful, why ABCDE closed down
As long as the geographical distribution of a species is wide enough, geographical variation will occur.
ABCDE was deeply hurt by the BTC L2 track and invested a total of US$40 million in three years. Facing no higher returns, they directly entered the post-investment stage (refer to previous issues: The final stage of crypto VC, what did YZi invest in).
As early as 2023, some Chinese VCs have begun to move to the secondary market, or stopped raising new funds and focused on supporting invested projects on Binance, Gate, or Matcha. The more they can exit, the less they will lose. The Web3Port transformation is correct, but it is a pity that it is a bit greedy.
Never earn the last penny, otherwise you will become the target of public criticism as an emotional focus. However, Li Chaoren who said this also became a doomsday cucumber. The temptation of money is not subject to personal will.
A16Z doesn't think so. From the perspective of absolute return rate, Silicon Valley VCs that like to play the long game may not be as good as Chinese VCs. However, a16z AI has raised $20 billion, and even the startup accelerator (CSX) has a starting investment of $500,000, while the overall Crypto fund size has exceeded $7.6 billion.
This is no longer a mutation; it has become a part of the existing ecology and even the future ecology.
Getting investment and getting investment from a16z are two different things.
If we expand our perspective, the crypto industry begins to show the following patterns: the West is responsible for concept issuance, the East is responsible for project development, the West is responsible for capital concentration, and the East provides liquidity.
Chinese exchanges such as Binance still have the largest liquidity, and Bitget is also famous for its proprietary market-making business. But why are we gradually taking pride in "internationalization" and putting the Chinese-speaking market second at all levels, from exchanges to VCs?
Image caption: a16z American Dynamism Image source: a16z
In terms of exchanges, stablecoins, and even compliance, we are showing a backward fundamental appearance. We do not spread emotions, but only share facts. We are at a turning point in history.
Web2 already has this, and it is even more severe in Web3.
After DeepSeek R1 was “exported to imported”, traditional VCs that had gradually become silent along with Chinese stocks began to recover since 2018. However, it must be admitted that the concept of US dollar + BVI + VC + Chinese market has gradually disappeared.
More and more Internet strategic investments are becoming independent and cancelled, local governments' industrial guidance funds are becoming more interested in "hard technology" and localization, the central government is planning and laying out future industries, and state-owned financial enterprises and central enterprises are paying more attention to policy trends and value preservation and appreciation.
ABCDE, or the reasons for the decline of the entire Chinese Crypto VC are actually self-evident:
1. a16z can love the United States and the U.S. dollar. The companies it invests in Silicon Valley are naturally global, and the new global information capitalism platform is embedded in its genes.
2. Chinese VCs cannot directly embrace the Chinese market and can only rely on the Western halo and compete with their peers by selling out the liquidity of the Chinese-speaking market.
After the dissolution of A&T, major Internet companies basically ignored Web3, local governments and state-owned enterprises basically only talked about chains, and were even afraid of currencies, let alone participating in investment and market making. The trial of a few state-owned and private financial groups in Hong Kong and Singapore was more like a strategic defensive posture.
The US dollar is a product, and the US market is the frontier of the global market. a16z has a low fundraising threshold and a huge scale, but compared with the global market, there is still huge potential for profit.
a16z can fail 1,000 times until the next Meta or Google comes along.
Mobilization or speculation: Where is the Chinese cryptocurrency world heading?
Neanderthals had beautiful stone tools, but were stupid craftsmen.
In Western history, finance has always been a means of mobilization. Behind the Dutch tulips and the British South Sea Securities were the incredible successes of the Dutch and British East India Companies. However, Spain and Portugal, which insisted on royal monopoly, lost the whole world after robbing American silver.
The failure of the two countries was not due to the failure to channel silver into the industrial sector, but to the lack of awareness of financial and social participation. The innovation of a king was not enough to change the fate of the country.
A new version of God
This is true for all Chinese VCs. LP's high demands and quick returns are not a problem; the inability to meet them is the VC's problem. a16z does not solve this problem either, but YZi (Prev Binance Labs)'s investment preference is trading products, ranging from DEX to other CEXs, including FTX.
Similar to Arthur Hayes's family office Maelstrom doesn't care much about market trends. Instead, it follows its own aesthetic preferences, demystifies everything, and respects innovators. Facts have proved that Ethena Like / Delta Like products are about to become the mainstream choice in the market.
Innovation does not happen on Twitter, where traffic is high, but more often in the hearts of individuals. And the founder who has gone through countless hardships needs money, a big name, or the support of key figures and nodes, which is not something that can be told to outsiders.
Assassins Revolt Against the Technolords
The future is not necessarily progressive. The greater trend of various platforms is to become the "lords" of the information age, blocking the way for latecomers in the name of technology and progress, such as Blue Origin's all-female space travel group, and Vitalik's mention of the Risc-V concept after switching to PoS. The names of DAO and foundation cannot prevent individuals from exerting influence in reality.
We need new people and new innovation paths.
Which will come first, the technological singularity or the surprise attack? Hyperliquid may be sophisticated enough, but for Binance and USDT, the impact it should have is not big enough.
Speculation is not long-termism
The fact is that our role is a token dumping ground. We have the largest liquidity for no reason, but we are powerless in the face of Western VCs, policies and exchanges, because money can unite people enough, but people are inherently selfish.
If some people are known as long-termists, then remember that SBF's favorite things are being a vegetarian and spreading effective altruism. Of course, Movement Labs has proved that being friends with Trump is more useful than that.
Speculation is speculation, long-termism is long-termism, and speculators will never agree with long-termism.
Bitcoin has only been on the market for 17 years. It is easy to tell who is real and who is fake: making a profit by holding Bitcoin, making a profit by guiding others to hold and trade Bitcoin, and making a profit by exchanging your Bitcoin for your own tokens.
Long-termism is similar to effective altruism. The first thing to do is to solve the problem of how to survive until the day when the results are confirmed.
Conclusion
Income is a series of events, and when the waves surge, the true character of a hero is revealed.
Cultural traditions, like TVL, will also become liabilities for the project owners. Creditors are just waiting to exercise their rights, and projects that rely on junk terms to attract liabilities are tantamount to dead futures.
The imbalance between the East and the West is like the distance from the Westernization Movement to Bitcoin. It seems far away and unrelated, but in fact, the cause and effect of fate has been determined when we open our eyes to the world.
The only question is, can our generation of crypto practitioners construct public goods for the whole world from the local liquidity market, trade around the world and profit from it?
