Primary investment is struggling, while the secondary market welcomes professional players.
Written by: Wenser, Odaily
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 fund".
The news shocked the market. Some believe this event signifies how harsh the crypto investment environment is, to the point where investment institutions can barely survive. Others see it as a necessary stop-loss measure. Some think the subsequent emergence of incubators indicates that crypto capital is shifting its focus to direct token issuance. Odaily will sort out the follow-up of this event and briefly explore the potential direction of crypto capital.
ABCDE Ends Investment, Vernal Incubator Takes Over
In the tweet announcing ABCDE Capital's suspension of new project investments, Du Jun briefly shared subsequent plans:
- Launch a new incubator brand Vernal, announcing 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 fund investment: nearly $40 million invested, supporting over 30 projects, leading over 50% of the projects.
Additionally, Du Jun emphasized that this move is "completely my personal choice to change 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 isn't about funds or capability, but about direction choice."
In other words, after experiencing primary investment that was like cooking in fierce fire yet contradictory to the market's short-term profit-seeking ecosystem, Du Jun's interest has shifted to "truly promoting industrial progress", hoping to "accompany mission-driven teams and incubate enterprises that can bring long-term value to the industry and society. As an industry participant, 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 seems to be a defeat of a long-term value investor with idealistic aspirations.
At a time when everyone is diving into MEME coin speculation, VC market participation is cooling, and countless projects are falling into a self-destructive cycle of "fundraising - listing - dumping - disappearing", leaving investors and market retail traders bewildered and paying for their losses. The market increasingly tends towards short-term "one-wave" mutual harvesting, rather than long-term technological route development, real user growth, and slowly rising token prices.
Of course, this is a systemic mechanism that cannot be decided by a single institution or user. In this cycle, mainstream coins including ETH and Altcoins are showing varying degrees of decline, and ABCDE's invested projects are no exception. According to crypto KOL @Anymose 96's statistics, among ABCDE's invested projects that have issued tokens, the maximum price drop reaches 95.5%.
A snapshot of Altcoin bloodbath
Based on this, capital institutions at the upper end 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 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 transform towards secondary market investment and trading while maintaining primary market involvement, seeking better market performance and capital returns;
The other type chooses to bet on new narratives like AI and MCP, seeking potential future paths through broader attention, capital scale, and application products. This is also one of the main reasons why recently invested projects are primarily 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 core logic - continuously updating asset types and issuance methods.
In this aspect, crypto KOL Crypto Weituo'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 are basically dead: 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 companies' "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 level, where you can't beat 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 About Money, So Why Such a Big Difference?". 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 investment is somewhat inevitable - because in a capital market with increasingly concentrated liquidity, attention and volatility coexist, gambling and probability fly together.
Excluding tracks like RWA and PayFi that tell stories to outsiders, the ultimate game mainline will still return to trading, which is the crypto players' main battlefield.
