Original｜Odaily Planet Daily (@OdailyChina)
Last weekend, ABCDE co-founder Du Jun officially announced that "ABCDE Capital has stopped investing in new projects and suspended the fundraising plan for the second phase of the fund."
The news sent shockwaves through the market, with some believing that this event marks a sign that the primary investment environment in the crypto market is too harsh for investment institutions to cope; others think this move may be a necessary choice to cut losses; and some believe that the emergence of subsequent incubators indicates a shift in crypto capital focus towards directly issuing tokens. Odaily Planet Daily will summarize the follow-up to this event in this article and briefly discuss the possible direction of crypto capital.
ABCDE Ends Investment, Vernal Incubator Takes Over
In the tweet announcing ABCDE Capital's halt on new project investments, Du Jun briefly shared the subsequent plans:
Launch a new incubator brand, Vernal, with shareholders, incubation rules, and the first batch of projects to be announced in May;
Engage in secondary trading. Detailed buying targets, volumes, and reasons for purchases will be announced in May;
A brief summary of ABCDE's first phase fund investment: nearly $40 million invested, supporting over 30 projects, with more than 50% of projects led by them.
Additionally, Du Jun emphasized that this move "is entirely my personal desire to change my approach and rethink how to participate in the industry's development. The team is great, and there are no issues with fundraising; 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 a primary investment environment that is contrary to the short-term profit-seeking ecological atmosphere of the market, Du Jun's interest has shifted to "truly promoting industry progress," hoping to "accompany mission-driven teams to incubate enterprises that can genuinely bring long-term value to the industry and society. As a member of the industry, I believe we have a responsibility to promote a return to rationality and health in the ecosystem, rather than being swept away by short-term speculation."
It must be said that from this statement, it can be seen as a rather idealistic long-term value investor's setback.
In the current frenzy of meme coin speculation, the participation of VC coins in the market has cooled, with countless projects entering a vicious cycle of "fundraising - listing - dumping - disappearing," leaving investors and market retail traders in disarray, paying for their losses. The market is increasingly leaning towards short-term "wave-style" mutual harvesting, rather than long-term technological route development, real user growth, and slowly rising token prices.
Of course, this is not a systemic mechanism that can be decided by any institution or user; this round of cycles has seen mainstream coins, including ETH, and altcoins decline to varying degrees, and the projects invested by ABCDE are no exception. According to crypto KOL @Anymose96 statistics, the highest price drop among the tokens issued by ABCDE's invested projects has reached 95.5%.
A Reflection of the Bloodshed in Altcoins
Based on this, capital institutions situated in the upstream of the crypto ecosystem can no longer sit idle and urgently need a version update to better navigate the current market pain period.
New Choices for Crypto Capital: Balancing Primary and Secondary, Embracing New Narratives
Looking at the current market, crypto capital is gradually diverging into two major routes:
One type, represented by ABCDE, chooses to balance primary investments while transitioning to secondary investments and trading, seeking better market performance and financial returns;
The other type opts to bet on new narratives such as AI and MCP, seeking potential future paths through a broader range of attention, capital volume, and application products. This is also one of the main reasons why recently funded projects are primarily concentrated in fields like computing, data, and AI.
In this regard, the main changes in the market are reflected in the effective contraction of capital power and the shift in narrative direction; what remains unchanged is the main logical thread of the crypto market—constantly updated and iterated asset types and asset issuance methods.
In this aspect, the summary by crypto KOL Crypto Veda is quite on point:
The market continuously rewards teams that "can create assets and markets with high volatility and high liquidity at the lowest cost." Those without the ability to create volatility and liquidity through "application" narratives have basically perished: such as the "Web3" logic of "reconstructing Web2" mentioned by @YeruiZhang, including Social, Gaming, ID, one counts as one. Because these projects are essentially products of the "platform - application" logic of traditional large companies, ultimately commercializing through applications (harvesting). This logic requires scale and decreasing marginal costs, not liquidity.
But what is the crypto circle? Tokens can be "commercialized" from day one, and liquidity is an inherent "commercialization" indicator. Abandoning this main indicator means you do not belong to the crypto circle, and your valuation model and competitive product comparisons will fall back to Web2, where you cannot compete with Web2 products—in the crypto circle, liquidity is the moat, and mechanisms are the main assets (not "application" products).
This aligns with the viewpoint we previously mentioned in “Web2 VS Web3 AI Projects: Both for Money, Why the Gap is So Big?”, where Web3 projects are about creating assets, refining them as products, and ultimately feeding back to applications or breaking away from applications, thus achieving longer-term liquidity aggregation and attention resource allocation.
From this perspective, the shift of crypto capital towards secondary investments is somewhat inevitable—because in a capital market where liquidity is increasingly concentrated, attention and volatility persist, and gambling and probability coexist.
Aside from telling stories to outsiders through RWA, PayFi, and other tracks, ultimately everyone's main storyline will return to trading, which is the main battlefield for crypto players.
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