The correlation between Bitcoin's price and fundraising amounts in the cryptocurrency market reveals intriguing insights. As Bitcoin prices decline, fundraising follows suit—even when BTC and ETH valuations remain higher than the 2018 bull market peak. This paradox raises a critical question: Are venture capitalists (VCs) truly market leaders, or are they merely reacting to trends?
Key Observations from Industry Experts
1. Market Trends vs. VC Behavior
- Polygon Ventures' Sachi Kamiya notes that while U.S. VCs often chase market trends, Asian VCs actively seek opportunities during bear cycles.
- Anonymous Angel Investor ("Anon") highlights that projects may delay announcements until market conditions favor their launches.
- TRGC’s Etiënne points to capital waiting on the sidelines—unlike the 2019 bear market, where liquidity was scarce.
2. DeFi Funding Decline
2023 Data:
- Total DeFi funding: $779M across 175 rounds (avg. $4.45M per round).
- Sharp drop from 2022 ($3.56B across 341 rounds).
- Worst-Performing Sectors: NFTs and DeFi (excluding exchanges, which dominate 38% of Q3 funding).
3. Opportunities Amidst Challenges
- Sachi Kamiya: "Investing now positions portfolios for the next cycle."
- Jaimin (Caddi Founder): Early projects face hurdles as investors demand exponential growth metrics (users, TVL, revenue).
- Anon’s Warning: Avoid over-concentration—even VCs suffer heavy losses from poor diversification.
Lessons from Crypto VCs
🔍 Due Diligence Matters
- Scrutinize user metrics and founder credibility.
- Question partnerships: Are incentives (e.g., token swaps) artificially inflating appeal?
🛡️ Risk Management
- Diversify investments.
- Recognize that "fair launches" aren’t always equitable—insider advantages persist.
📚 Continuous Learning
- Jaimin: "Upskilling in DeFi pays off—understanding niches lets you add value."
- Etiënne: Seek wisdom from veteran investors (e.g., Howard Marks, Nassim Taleb) over hype-driven crypto VCs.
FAQ Section
❓ Why do crypto VCs sell to retail investors?
VCs face lock-up periods, forcing sales during downturns—exacerbating altcoin price declines.
❓ Can we replace VCs with fair launches?
Fair launches often favor insiders; VCs provide capital, mentorship, and credibility for complex projects.
❓ What’s the散户 investor’s edge?
Anticipate trends early—avoid FOMO-driven investments.
👉 Discover how top protocols leverage VC funding
👉 Master DeFi investing with data-driven strategies
Bottom line: Crypto VCs aren’t infallible. Retail investors can outperform by combining research, diversification, and trend anticipation—while learning from both successes and failures in the space.