Original | Odaily (@OdailyChina）
Author | Wenser (@wenser 2010）
Last weekend, ABCDE co-founder Du Jun officially announced that "ABCDE Capital has stopped investing in new projects and suspended the fundraising plan for its second-phase fund".
The news shocked the market, with some believing the event signifies how harsh the crypto investment environment has become, to the point where investment institutions can barely survive. Others see it as a necessary stop-loss measure, while some believe the emergence of subsequent incubators indicates a shift in crypto capital's focus towards direct token issuance. Odaily will sort out the follow-up to this event and briefly explore the potential direction of crypto capital.
ABCDE Ends Investments, Vernal Incubator Takes Over
In the tweet announcing ABCDE Capital's halt on new project investments, Du Jun briefly shared his subsequent plans:
Launch a new incubator brand Vernal, to announce shareholders, incubation rules, and first batch of projects in May;
Dive into secondary trading. Detailed purchase targets, volume, and reasons will be announced in May;
Briefly summarize ABCDE's first-phase fund investment: invested nearly $40 million, supported over 30 projects, with over 50% being lead investments.
Additionally, Du Jun emphasized that this move is "completely my personal desire to change my approach and rethink how to participate in industry development. The team is great, fundraising has no issues, and the two cornerstone LPs have sufficient funds and are willing to continue supporting. This is not a matter of funds or capability, but a choice of direction."
In other words, after experiencing first-stage investments that were fiery yet contrary to the market's short-term profit-seeking ecosystem, Du Jun's interest has shifted to "things that truly promote industrial progress", hoping to "accompany teams with a sense of mission and incubate enterprises that can truly bring long-term value to the industry and society. As a member of the industry, I believe we have a responsibility to promote ecological rationality and health, rather than being swept up in short-term speculation."
It must be said that from this statement, this can be considered a setback for an idealistic long-term value investor.
In the current MEME coin speculation frenzy, VC crypto market participation has cooled, with countless projects falling into a self-destructive cycle of "fundraising-listing-dumping-disappearing", leaving investors and market retail investors bewildered and paying for their losses. The market increasingly tends towards short-term "one-wave" mutual harvesting, rather than long-term technological development, real user growth, and slowly rising token prices.
Of course, this is not something that can be decided by a single institution or user, but a systemic mechanism. In this cycle, mainstream coins including ETH and Altcoins have shown varying degrees of decline, and ABCDE's invested projects are no exception. According to crypto KOL @Anymose 96's statistics, the maximum price drop among ABCDE's invested and launched token projects reached 95.5%.
A Snapshot of Altcoin Bloodbath
Based on this, capital institutions in the upper crypto ecosystem are also restless, urgently needing an update to better navigate the current market pain period.
New Choices for Crypto Capital: Balancing Primary and Secondary Markets, Embracing New Narratives
Looking at the current market, crypto capital is gradually dividing into 2 main routes:
One type, represented by ABCDE, chooses to balance primary market investments while transforming towards secondary market investments and trading, seeking better market performance and capital returns;
The other type opts to bet on new narratives like AI, MCP, seeking potential future paths through broader attention, capital scale, and application products. This is also a key reason why recently invested projects are mainly concentrated in computing, data, and AI fields.
In this regard, the market's main changes are reflected in the effective contraction of capital forces and narrative shifts; what remains unchanged is the crypto market's main logic - continuously updating asset types and issuance methods.
Crypto KOL Crypto Skanda's summary is quite apt:
What the market continuously rewards are teams that "can create assets and markets with high volatility and liquidity at the lowest cost". Projects without "application" narratives that can create volatility and liquidity have basically failed: like the "Web3" logic of "reconstructing Web2" mentioned by @YeruiZhang: Social, Gaming, ID - pick any one. Because these projects are essentially products of traditional big tech's "platform-application" logic, ultimately commercialized (harvested) through applications. This logic requires scale and decreasing marginal costs, not liquidity.
But what is the crypto world? Tokens can be "commercialized" from day one, and liquidity is an inherent "commercialization" indicator. Abandoning this main indicator means you don't belong to the crypto world, and your valuation model will fall to Web2, where you can't even compete with Web2 competitors - in crypto, liquidity is the moat, and mechanism is the main asset (not "application" products).
This aligns with the viewpoint we previously mentioned in 《Web2 VS Web3 AI Projects: We're All Doing It for Money, So Why Such a Big Difference?》, that Web3 projects are creating assets, polishing assets as a product, ultimately benefiting applications or breaking away from applications, thus gaining longer-term liquidity aggregation and attention resource allocation.
In this sense, crypto capital's move towards secondary investments is somewhat inevitable - because in a capital market with increasingly concentrated liquidity, attention and volatility coexist, with gambling and probability flying together.
Aside from RWA, PayFi, and other tracks used to tell stories to outsiders, the main game line will ultimately return to trading, which is the crypto players' main battlefield.
