East Meets West: Diverging Investment Strategies in Global Venture Capital Markets

　　In the ever-evolving landscape of venture capital, a noticeable divergence has emerged between Eastern and Western investment strategies, particularly in the realm of cryptocurrency and blockchain technologies. This divergence is not merely a reflection of differing market conditions but also indicative of deeper cultural and strategic undercurrents that shape investment decisions across these regions.

　　Recently, discussions with several Asian venture capital firms revealed a collective shift towards a more conservative investment approach. Many have entered a phase of 'pause,' with investment activities significantly slowing down. For instance, the last investment made by one prominent firm was back in January, and similar cases of prolonged inactivity are common among peers. The prevailing sentiment in the market is best described as 'boredom,' a temporary consensus that seems to have taken hold.

　　This sense of stagnation is not entirely linked to the secondary market's performance. Historically, even during downturns, such as the post-Luna crash period, there was still excitement around innovative projects in areas like ZK-rollups, DeFi, GameFi, and AI. However, as we moved into 2025, this excitement has waned. The secondary market's inability to sustain interest in new narratives for more than a few days has inevitably influenced the primary market's mood. A more concerning question arises: Have we reached a stage where the 'low-hanging fruits' have been picked, leading us into a prolonged period of adjustment, exploration, and transformation, accompanied by significant growing pains?

　　Contrastingly, Western venture capital firms appear to be operating under a different set of dynamics. A recent example involves a DeFi project that was pre-seeded last year and is now raising a seed round. Despite the challenging market conditions, the project managed to oversubscribe by several million dollars, with multiple Western VCs eager to invest. This outcome was surprising, especially considering the project's solid but not exceptional quality. The question then becomes: Why are Western VCs still actively investing while their Asian counterparts are holding back? What drives their willingness to pull the trigger at current valuations?

　　Several hypotheses have been proposed within our team:

　　1. The timing of fund establishment differs between Western and Asian VCs, leading to varying exit cycles and investment decisions.

　　2. Asian VCs often exhibit a 'small-town scholar' mentality, focusing intensely on outperforming peers or at least matching Bitcoin's returns—a goal increasingly difficult in the current market. Western VCs, on the other hand, seem to embrace a more idealistic and long-term approach, prioritizing clear justifications for investments over immediate returns.

　　3. There might be a straightforward need to deploy funds to facilitate the raising of subsequent funds, with management fees being a primary motivator.

　　The exact reasons remain unclear, prompting plans to engage with Western VC partners and researchers in the coming weeks to gather insights and update our understanding.

　　Reflecting on the concept of 'low-hanging fruits,' it's crucial to consider the future trajectory of Crypto. Personally, and within our firm ABCDE, the long-term bullish stance on Crypto remains unshaken—it's almost a 'faith.' However, in the medium term, we find ourselves at a crossroads, reminiscent of the period before the DeFi Summer of 2020. Listening to AllianceDAO's podcast recently, three points resonated deeply:

　　1. The current uncertainty mirrors that of 2019, before the emergence of DeFi Summer.

　　2. Crypto's primary product-market fit (PMF) has been in finance, specifically in trading, lending, stablecoins, and asset issuance.

　　3. There's a growing trend of AI x Crypto startups removing Crypto elements to focus solely on AI, suggesting a potential shift in project focus.

　　These observations lead to critical questions about the future of Crypto. If the primary utility of Crypto is financial, and if both utility and narrative-driven innovations have reached their limits, what lies ahead? The exploration of blockchain infrastructure, from Ethereum to Solana and beyond, suggests that we might be nearing the boundaries of scalability. The concept of 'modular blockchain'—where blockchain technology is abstracted into a functional module integrated into startups, akin to AI—presents a potential new direction.

　　This approach could lead to a fusion of Web2 and Web3, where projects are designed to solve real-world problems, incorporating Crypto or AI elements as needed. This shift could redefine the current ecosystem of Crypto VCs, exchanges, and studios, challenging the existing Crypto-native industry structure.

　　As we ponder these developments, the question remains: Will this new phase of Crypto evolution be perceived as 'boring'? And more importantly, how will the current Crypto-native industry adapt to these changes? The answers to these questions will shape the future of venture capital in the global Crypto landscape.