Opinion: The market does not dislike VC-backed projects; it dislikes projects that don't generate wealth effects.
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Opinion: The market does not dislike VC-backed projects; it dislikes projects that don't generate wealth effects.
The博弈 between institutions and retail investors will not lead to a reshuffling of the market landscape.
Navigating Web3 tides with focused insightsAuthor: ZTZZ
The market isn't inherently opposed to institution-led projects; rather, this cycle's institution-driven projects simply haven't generated wealth creation effects.
The fundamental reason behind the lack of momentum in this rally is that BTC's sudden ETF approval caused a rapid surge from the bottom—before sufficient market shakeout occurred—immediately igniting fundraising enthusiasm in Europe and North America. You can clearly sense how narratives like DEPIN and AI exploded, but Western players aren't skilled at building communities or sustaining organic buying demand. These high-FDV projects, which raised funds quickly, were almost all rushing toward listing, leaving no time to solidify their foundations or cultivate real buy-side support. Simply put, this bubble came too fast. If you blow a bubble too hard, it bursts easily. To inflate a big bubble, you need slow, steady breath.
After the massive expansion in 2021, the market needed new narratives and fresh rags-to-riches stories to expand itself further, drawing in external traffic and capital. If you observe carefully, you'll notice that after BTC surpassed 70,000, there hasn't been any breakout news for a long time—nothing close to the market frenzy before the May 19 crash. So this is just a chain reaction: BTC’s sudden surge sent North America into a frenzy, making early-stage fundraising too easy, thus spawning these high-FDV projects.
To be blunt, North American investors didn’t even think through their exit strategies when investing!
That’s why high-FDV projects emerged. They chose to inflate FDVs, use VC capital for airdrops, accumulate user data, and then leverage that data to pressure exchanges—using major exchanges as their ultimate exit channel. They did succeed in this scheme. But now, leading exchanges like Binance have woken up. That’s why He Yi said, “We don’t want to list similar projects anymore.” These project structures are designed for retail investors to ultimately take the bag. If the project lacks strong community support, it ends up harming retail users on exchanges. The reason you see many people recently criticizing Binance on Twitter is precisely due to the aftermath of these high-FDV projects.
The tug-of-war between institutions and retail won't lead to a complete market reshuffle. Even during a bear market—where most retail gets shaken out first, followed by VCs who can't adapt—the extreme scenario of 2018, where project teams indiscriminately reaped VCs, leading to liquidity crises, won’t happen again. Today’s market is no longer as immature as it once was.
Do high-FDV, low-circulation projects hold long-term value? I believe such projects have inherent structural flaws—financing models that make it difficult for retail investors to profit—but they shouldn't be entirely dismissed. Retail can selectively monitor sector leaders, treating them purely as secondary market trading opportunities. Trading these high-FDV leader projects on secondary markets tends to be straightforward.
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