The Power of A16Z and the Exit of ABCDE: The Evolution of Encryption VC

In the field of cryptocurrency investment, a striking phenomenon is occurring: some well-known venture capital firms are adjusting their strategies or exiting the market, while others continue to maintain strong momentum. This change reflects the complexity and uncertainty of the crypto industry, while also revealing deeper changes in the global investment landscape.

The Exit of ABCDE

ABCDE's investment in the BTC L2 track has encountered setbacks, having invested a total of $40 million over 3 years, and has decided to enter the post-investment management phase. This decision reflects the high risk and uncertainty of returns in the encryption market. In fact, as early as 2023, some venture capital institutions with Chinese backgrounds have begun to shift towards the secondary market or reduce new investments, focusing on helping invested projects to go public on mainstream trading platforms to minimize losses.

This trend indicates that in the rapidly changing encryption market, investors need to constantly adjust their strategies to balance risks and returns. However, an excessive pursuit of short-term gains may cause investors to become the focus of market sentiment, leading to controversies.

A16Z's Continued Strength

In stark contrast to the exit of ABCDE, A16Z continues to demonstrate strong performance. Although A16Z may not have as high absolute returns as some investors focused on short-term gains, its $200 billion fundraising in the field of artificial intelligence, along with over $7.6 billion in its cryptocurrency fund, showcases its strong capital strength and long-term investment vision.

A16Z's investment is not just a capital injection, but also a form of brand endorsement and resource integration. This gives projects that receive A16Z investment a significant advantage in the market, making it easier to obtain other resources and support.

Changes in the Investment Landscape Between the East and the West

The cryptocurrency industry is presenting a new pattern: the West is responsible for conceptual innovation and capital concentration, while the East focuses on project development and providing liquidity. Although some Asian exchanges still hold an advantage in terms of liquidity, the entire industry is undergoing an "internationalization" process, and the original model of USD + BVI + VC + China market is gradually disappearing.

This change reflects a deeper issue:

1. Western investment institutions, such as A16Z, can naturally integrate into the global information capitalism platform.
2. Investment institutions with an Asian background are facing the dilemma of being unable to directly embrace the local market and can only rely on the Western halo to compete.

Future Outlook

In the face of this changing landscape, participants in the encryption industry need to rethink their positioning and development strategies. Innovation should not be limited to following market trends, but should stem from a profound understanding of the essence of the industry and forward-thinking about the future.

At the same time, we also need to be vigilant about the risks posed by technological monopolies. As large platforms gradually become the "lords" of the information age, how to maintain the openness and innovative vitality of the industry will become an important issue.

Conclusion

The development of the cryptocurrency industry is at a critical turning point. In the face of changes in the global investment landscape, participants need to maintain a spirit of innovation while also having a long-term vision. True value creation does not lie in short-term speculative profits, but in the ability to build public goods oriented towards the global market and achieve sustained value growth.

In this era full of opportunities and challenges, how to balance local advantages with a global perspective, and how to find a balance between risk and return, will be questions that every participant in the encryption industry needs to ponder deeply. Future success will belong to those who can seize opportunities amid change and bring substantial innovation and value to the industry.