BitMEX founder Arthur Hayes pointed out in his latest article that retail investors are indifferent to currencies backed by venture capital (VC), which reflects a series of deep-seated problems and challenges. This article not only reviews the historical development of the cryptocurrency market, but also provides suggestions on how the project team can deal with the apathy of retail investors. (Preliminary summary: Arthur Hayes: The bull market must remain rational and cash out at the right time. Bitcoin will be worth $250,000 by the end of next year) (Background supplement: Arthur Hayes: Bitcoin will be worth $250,000 by the end of 2025! Dogecoin is worth $1) Recently, BitMEX founder Arthur Hayes published on his blog (The Cure), about why retail investors reject VC coins? What to do, the resurgence of ICOs and how it can be an antidote to the over control of centralized exchanges (CEX) and venture capital (VC). The essence of the article is summarized for you below: The Rise and Social Background of Cryptocurrency Hayes believes that the success of cryptocurrency is no accident. There are three key factors behind its rise: government control, revolutionary technology, and wealth effects. Global wealth and power are increasingly concentrated, and the influence of big business transcends national borders, leaving most people in poverty or the middle class unable to share in the fruits of economic growth. The decentralized nature of cryptocurrencies provides a means to counter this phenomenon and gives ordinary users the opportunity to participate in a new wave of growth in the global economy. However, as the encryption market develops, the project's fund-raising methods gradually deviate from the original ideal of decentralization. In the past, capital raising relied on community participation and desire for wealth. However, today, venture capital-backed currencies are gradually dominating the market. This change has caused many founders to ignore the needs of users and focus more on catering to investor preferences. The rift between venture capital and retail investors Hayes pointed out that many tokens in the current cryptocurrency market are dominated by venture capital, and the fully diluted valuation (FDV) and initial circulating supply of these tokens are too high for retail investors to bear. For example, among the tokens issued in 2024, the market performance of many new coins is about 50% lower than that of mainstream cryptocurrencies (such as Bitcoin, Ethereum, etc.). Even though retail investors can purchase these tokens on centralized exchanges (CEX), they are unwilling to buy them due to the high prices, resulting in insufficient market liquidity and price collapse. This situation shows that the structure of the cryptocurrency market is already similar to the IPO (initial public offering) system of traditional finance. Retail investors often become "takers", and such investments do not bring enough returns to change their financial situation. Venture capital-backed projects usually reach high valuations when they go public, which greatly reduces the income potential for ordinary investors. The rise of Memecoin and reverse thinking Facing the indifference of retail investors towards VC-backed coins, Hayes proposed the rise of Memecoin as a reverse capital operation model. Memecoin is a token created based on Internet culture and Meme (meme), which usually has no actual intrinsic value. Nonetheless, Memecoin was able to gain extremely high market attention in a short period of time by quickly spreading and attracting the attention of speculators. For ordinary investors, the most attractive aspect of Memecoin is its ability to enter the market at a lower cost and pursue rapid wealth growth in the short term. This is in stark contrast to traditional VC-backed projects, which tend to emphasize the founder’s background, education and career experience rather than the technology itself or a true reflection of user needs. Hayes believes: This kind of venture capital investment standard has led to a disconnect with retail investors, because retail investors do not care whether the founder of a project is from Harvard or Silicon Valley, but are more concerned about the technical potential of the project and whether it can bring them High returns. Criteria of Value for Capital Formation Hayes proposes a simple framework for understanding the sources of value for different types of tokens. Memecoin's value comes from the spread of its Meme content, while VC-backed tokens rely more on the founder's background and the stereotype of a "successful founder." For retail investors, the most attractive are tokens that can quickly create market effects, regardless of whether they have actual products or services. Hayes revealed a core problem in the fundraising process of cryptocurrency projects: when venture capital focuses on background rather than technological innovation, the allocation of funds in the market is prone to imbalance, ultimately preventing ordinary investors from obtaining sufficient wealth returns. This runs counter to the original ideal of cryptocurrency to decentralize and allow ordinary people to share wealth. The needs of retail investors and the future path Although most initial coin offerings (ICOs) will eventually fail, there are still a few projects that can realize value through their strong memetic effect (spread effect) and technological potential. Hayes believes that in the future, the cryptocurrency market should pay more attention to how to allow retail investors to participate and truly benefit from it. He suggested that founders should return to the fundamental purpose of the project - to create products that meet user needs, rather than relying solely on venture capital funding. Hayes also emphasized that with the support of decentralized exchanges (DEX) and new token issuance methods, investors no longer need to rely on traditional venture capital institutions or intermediaries, but can directly participate and set prices based on market reactions. This model not only allows more teams from different backgrounds to gain access to opportunities, but also allows investors who are willing to take risks to obtain high returns. Finally, Arthur Hayes pointed out: The current indifference of retail investors in the crypto market to venture capital-backed tokens reflects the deviation of the value proposition in the market, and called on project developers to refocus on user needs rather than catering to venture capital. Related reports Arthur Hayes: The bull market must remain rational and cash out at the right time. Bitcoin will reach 250,000 US dollars by the end of next year. Arthur Hayes: Bitcoin will reach 250,000 US dollars by the end of 2025! Dogecoin looks at $1. Arthur Hayes’ new perspective: The Trump administration will start unlimited QE, and Bitcoin is expected to reach $1 million. "Arthur Hayes warns: retail investors are the "takers" of VC tokens, and it is time for this bull market to wake up." This article was first published on BlockTempo (the most influential blockchain news media).