VC coins need to return to growth-driven
It is not just VC coins that are in crisis, but the entire crypto market VC and the so-called "VC coins" have become the target of blame in the current environment. Although there are many views that VC coins are the culprit of this round of "difficult bull market takeover", this is not the case. If you make a comparison, you will soon find that it is not just VC coins, including fully circulated altcoins and even Ethereum (ETH) that have continued to fall.
Looking back at the DeFi Summer era, the initial circulation rate of most tokens did not exceed 5%. Therefore, the simple lack of liquidity cannot fully explain the collapse of these tokens. From a macro perspective, the "four-year bull market cycle" law is no longer applicable. Since the second quarter of 2024, the market has fallen into an abnormally low liquidity state. The peak of BTC's market value share appeared later than the high point of BTC's price, which usually corresponds to the bottom of the market in previous cycles.
This time, even if BTC hits a new high, it did not drive a general rise in altcoins, even ETH. This shows that the entire crypto market is facing a comprehensive crisis, not just VC coins.
From an industry perspective, the consequences of overinvestment and mispricing are beginning to emerge. VCs invest for profit, and the market value growth in the next cycle should provide them with opportunities to cash out. 2020-2021 is the golden age of VCs, and many VCs have successfully made profits in 2021-2022, which led them to expand their financing scale. But these financings did not bring corresponding real growth.
In the end, many projects that raised high valuations in 2021-2022 are now appearing in the secondary market at unreasonable valuations.
The role of KOL (opinion leaders) in the crypto market is underestimated and mismatched. High-quality KOLs can not only bring market publicity to projects, but also provide strategic advice and resources. However, because inferior projects in the market are willing to provide more favorable promotion conditions, low-quality KOLs are more likely to participate in promotion, forming a "reverse selection".
