The crypto venture capital landscape is undergoing a profound transformation. With ABCDE Capital’s recent announcement to halt new investments and suspend fundraising for its second fund, a wave of reflection has swept across the industry. What was once a high-octane era of rapid fundraising, token launches, and speculative gains is giving way to a more sober, value-driven phase. In this evolving climate, leading VCs—including Hash Global’s KK, Generative Ventures’ Will Wang, NGC Ventures’ Henry, Waterdrip Capital’s Jademont (Dashan), and CatcherVC’s Loners Liu—are re-evaluating their strategies, questioning outdated assumptions, and charting new paths forward.
This article dives deep into the current state of crypto venture capital, exploring the structural challenges, shifting power dynamics, and emerging opportunities that define the 2025 market. From the dominance of centralized exchanges to the rise of real-world asset (RWA) tokenization and Web3 infrastructure investing, we unpack the key trends shaping the next cycle.
The Structural Crisis Facing Crypto VCs
One of the most pressing issues in today’s crypto VC ecosystem is structural imbalance. Unlike traditional venture capital, where liquidity events are relatively predictable through IPOs or acquisitions, crypto projects often face extended lockup periods—sometimes up to three years—before tokens can be traded. This creates significant misalignment between risk and reward.
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As Will Wang of Generative Ventures points out, while early-stage valuations may appear high on paper, dilution from token emissions and poor secondary market performance frequently erode actual returns. Add to this the oversupply of projects flooding the market without clear exit mechanisms, and it becomes evident why many funds are struggling to justify continued deployment.
Jademont from Waterdrip Capital highlights another critical flaw: the disproportionate influence of centralized exchanges. In traditional finance, stock exchanges like NASDAQ serve as neutral platforms with minimal control over company governance or investor rights. In contrast, crypto exchanges—particularly dominant players like Binance—hold immense sway over project success.
“Projects go live on Binance, but investors don’t get their tokens as promised,” Jademont notes. “Agreements are rewritten unilaterally. Lockups extend indefinitely. There’s no recourse.” This power imbalance leaves VCs vulnerable and undermines trust in the entire investment process.
However, signs suggest this dynamic may be shifting. As newer listings on major exchanges fail to achieve multi-billion-dollar valuations, the perceived necessity of “getting listed” is weakening. Some founders now question whether a Nasdaq IPO might offer better liquidity and credibility than a tier-1 CEX listing.
Rethinking Investment Models: From Speculation to Real Value
With speculative returns drying up, VCs are refocusing on fundamentals. The era of “invest-to-flip” is fading, replaced by a renewed emphasis on long-term value creation.
Will Wang draws a parallel between today’s crypto markets and early 20th-century Wall Street—a time of innovation but also regulatory vacuum and governance failures. “Excess returns come from bearing real risk,” he argues. “If founders take VC money and launch a token in six months, they’re not taking meaningful risk. Why should investors expect outsized returns?”
To address this, his fund now targets ventures that inherently require long-term commitment—such as DePIN (Decentralized Physical Infrastructure Networks), RWA tokenization, and open-source public goods—that cannot be easily flipped for short-term gain.
KK of Hash Global echoes this sentiment, advocating for Web3 applications rooted in real business needs. Rather than chasing trends, his team focuses on helping established traditional businesses—especially in entertainment, sports, and content—leverage blockchain for efficiency gains.
“We don’t ask if they need Web3—we show them how it helps,” KK explains. “Faster settlements. Transparent royalty tracking. Global access without intermediaries.”
For example, enabling a travel platform to onboard users with invisible wallets and settle payments in seven days instead of thirty offers tangible benefits. Only after adoption does tokenization become relevant.
The Rise of Alternative Exit Strategies
Given the erosion of exchange-centric exits, VCs are exploring alternative liquidity paths. One promising route is traditional capital markets.
Jademont reveals that several portfolio companies are actively pursuing listings on Hong Kong’s Stock Exchange (e.g., codes 0043, 4905, 1723) or via SPACs on Nasdaq. These routes offer deeper liquidity pools and greater legitimacy—especially as regulators warm to crypto-native firms.
“SPACs are faster and cheaper than CEX listings,” he says. “And with accounting standards now allowing crypto revenues to be recognized legally, the path is clearer than ever.”
This shift demands new evaluation metrics: revenue traction, operational scalability, and regulatory readiness over TVL or social hype. Projects with real income—wallet providers, custodians, compliance-focused exchanges—are increasingly seen as viable candidates for equity exits.
Assessing Founders in a New Era
With survival skills more crucial than ever, investor criteria have evolved. Henry from NGC Ventures emphasizes two traits: cognitive edge and cross-cycle resilience.
“It’s not about blind gambling,” he clarifies. “It’s about founders who see opportunities others miss—and act decisively based on deep analysis.” He cites an early investment that pivoted successfully during bear market conditions, eventually becoming a category leader.
Equally important is the ability to operate across market cycles—maintaining progress in downturns and scaling aggressively when sentiment improves.
Loners Liu adds that rational risk-taking must be grounded in reality. “A founder burning cash on unnecessary expansion isn’t bold—they’re reckless.” True resilience means resourcefulness under constraints.
Beyond Meme Coins: Rebuilding Asset Value Foundations
The collapse of meme-driven speculation has forced a reevaluation of what constitutes valuable digital assets. Will Wang outlines three pillars: scarcity, yield, and liquidity.
Most altcoins lack all three. True value emerges when networks generate measurable impact—like Ethereum’s role in global settlement or stablecoins facilitating cross-border payments.
“Ethereum processes transaction volumes comparable to MasterCard,” Will notes. “Its financial influence justifies its valuation.”
In contrast, meme coins concentrate attention without creating lasting utility. “They’re gambling schemes,” he warns. “Average retail participants lose over 80% of their capital.”
Instead, VCs are turning toward infrastructure plays: stablecoins, fixed-income protocols, data layer solutions, and decentralized identity systems—areas where blockchain offers unique advantages.
Is Web3 Failing—or Just Finding Its Purpose?
A recurring debate centers on whether Web3 has lost its way. Critics argue that beyond Bitcoin and stablecoins, few applications deliver mass-market utility.
杜均 (Du Jun) responds thoughtfully: “Mobile internet changed daily life visibly—ride-hailing, food delivery, messaging. Web3 hasn’t done that yet.” But he rejects the idea that the direction is wrong.
“Blockchain may simply be best suited for financial use cases,” he suggests—citing cross-border payments, settlement efficiency, and asset tokenization as areas where its strengths shine.
He dismisses attempts to force blockchain into every domain: “Not everything needs to be on-chain. Many Web2 solutions are more efficient.” The future lies in identifying niches where decentralization provides undeniable advantage.
AI + Web3: Hype vs. Reality
While AI-themed tokens have surged, genuine integration remains limited. Henry observes that most so-called “AI + Web3” projects are merely riding the coattails of U.S. tech stock momentum rather than delivering functional synergy.
True convergence will likely emerge in areas like decentralized AI compute, on-chain agent coordination, and verifiable data provenance—but meaningful adoption requires time.
“Just like Web3’s own bubble years ago,” Henry cautions, “AI faces a correction cycle. Only those with product-market fit will survive.”
FAQs: Your Questions Answered
Q: Is crypto venture capital still viable in 2025?
A: Yes—but only for funds committed to long-term value creation. The days of quick flips are over. Success now requires patience, deep domain expertise, and alignment with real-world utility.
Q: Are centralized exchanges losing influence?
A: Gradually. As post-listing performance stagnates and alternative exits emerge (like traditional IPOs), the "Binance-or-bust" mindset is fading. True project quality matters more than exchange branding.
Q: What sectors offer the best investment potential today?
A: Infrastructure layers—stablecoins, DeFi rails, RWA tokenization, DePIN—and hybrid models that integrate Web3 into existing industries (e.g., media rights management) show strong promise.
Q: Should new investors back VC funds or go direct?
A: Given that fewer than 10% of crypto funds historically outperform Bitcoin over full cycles, direct investment—or selective backing of proven GP teams—may offer better risk-adjusted returns.
Q: Can Web3 ever replace traditional finance?
A: Not entirely—but it can disrupt specific functions: global settlements at near-zero cost, programmable money flows, permissionless access. These efficiencies could gradually erode legacy systems' dominance.
Q: How should students prepare for careers in crypto investing?
A: Focus on finance fundamentals first. As Will Wang advises: “Crypto isn’t just ‘Web2 with tokens.’ It’s a financial system.” Understanding monetary theory, risk assessment, and capital markets is essential—AI and coding skills are table stakes.
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Conclusion: A Maturing Ecosystem Ready for Real Impact
The crypto VC ecosystem is no longer chasing hype—it's learning discipline. From reassessing founder quality to embracing alternative exits and prioritizing measurable impact over speculation, investors are laying the groundwork for sustainable growth.
While challenges remain—from exchange dominance to weak secondary markets—the industry is evolving toward healthier fundamentals. The convergence of blockchain with real economic activity—via stablecoins, RWAs, and enterprise-grade infrastructure—is where lasting value will be built.
For those willing to play the long game, 2025 may well be the best time yet to invest—not in memes or mania, but in meaningful innovation that reshapes how value moves in the digital age.
Core Keywords:
crypto VC, Web3 investment, decentralized finance (DeFi), real-world assets (RWA), blockchain infrastructure, venture capital trends 2025, token valuation