Interview with the CEO of Waterdrop Capital: Amid market downturns, who is actually making money?
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Interview with the CEO of Waterdrop Capital: Amid market downturns, who is actually making money?
More precisely, it was those who could respond quickly and anticipate market trends who profited.
Navigating Web3 tides with focused insightsCompiled & Translated: TechFlow
Guest: Jademont Zheng (Da Shan), CEO and Co-founder of Waterdrip Capital
Host: Bonnie
Podcast Source: Bonnie Blockchain
Original Title: Bitcoin Crash in 2025! Who Actually Made Money This Bull Run? Crypto Winners Reshuffled: Who Will Have the Last Laugh? Jademont Zheng [Bonnie Blockchain]
Air Date: November 6, 2025
Key Takeaways
This episode features Jademont Zheng (Da Shan), CEO and Co-founder of Waterdrip Capital, discussing the following topics:
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Who actually made money in this bull run?
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Has the essence of crypto fundamentally changed in 2025?
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Is it truly the era of retail exiting and institutions entering?
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How long can the Bitcoin ETF boom last?
Highlights of Key Insights
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In any market, it's extremely difficult for everyone to make money.
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Prior to 2017, Shanghai—not New York—was the global center of blockchain.
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Judging whether someone is an OG isn't about how much Bitcoin they hold, but their beliefs and ideals.
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As VCs, we want to support truly innovative companies. The old model of quickly launching a product, listing it on exchanges, and cashing out is completely outdated.
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There are far fewer startup projects now, giving us more time to deeply research and analyze them, with larger investment amounts. Past investments favored broad coverage; now we focus on quality.
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We boldly predicted over ten years ago—or even earlier—that Bitcoin would reach $100,000.
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No one publicly discloses exactly how much Bitcoin they hold.
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Those who've held Bitcoin for over ten years no longer care much about price. They believe Bitcoin reaching $1 million is inevitable and see no point in debating price anymore.
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Bitcoin’s price rises due to consensus, but if Bitcoin remains long-term in cold wallets without active use, its social value significantly diminishes.
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For many OGs, Bitcoin surpassing $100,000 may not mean much—adding another zero doesn’t significantly change their lives.
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If a decentralized economic system can thrive and even replace parts of traditional finance, that would be truly exciting—an entirely new economic order emerging.
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The U.S. may intentionally be building a parallel trade and payment system outside SWIFT.
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Bitcoin was designed to ensure security through technology itself, not reliance on human moral constraints.
Who Actually Made Money in This Bull Run?
Bonnie: Jademont, I’d like to discuss with you who really made money in this bull run. Many say this cycle is institution-driven, especially after spot Bitcoin ETFs launched, bringing institutional capital into the market. What’s your take on the current bull market?
Jademont:
This is an interesting question. In fact, in any market, it's extremely difficult for everyone to make money. Looking at the past two or three years, institutions did make money. More precisely, those who could react quickly and anticipate market shifts were the ones who profited. For example, during Trump’s administration, the U.S. adopted a friendlier regulatory stance toward crypto—those who caught this trend made gains. Conversely, those sticking to the old strategy of trading small-cap altcoins likely faced significant losses.
Bonnie: I’ve heard that venture capitalists (VCs) are now reluctant to back new projects, while top-tier exchanges prefer mature companies like Bitcoin reserve firms or Ethereum reserve firms. Is that true?
Jademont:
Not exactly. As VCs, our main goal isn’t holding mainstream assets—these are typically held by large institutions or traditional financial players. Our role is to support innovative startups and early-stage founders. But the game has changed. A few years ago, we saw countless new startups emerge. Now, walking through a conference expo, you’ll notice fewer small teams—most are established companies or traditional businesses.
Today’s entrants into crypto have stronger capital backing, but as VCs, we still aim to back truly innovative ventures. The old model of rushing a product to exchange listing and cashing out is completely obsolete. The companies we now back have longer-term visions—aiming for stable growth within three to five years, or becoming industry leaders in five to ten years. Whether they eventually issue tokens or go public is just a structural choice, neither inherently better nor worse.
Bonnie: Can I interpret this as many so-called DAT reserve companies also have comparable growth potential to new projects? Is your support for new ventures driven not only by safer profits but other considerations?
Jademont:
For VCs, the long-term returns from holding DATs might resemble those of major cryptocurrencies. For instance, investing in a Bitcoin reserve company usually correlates directly with Bitcoin’s price movement. But with early-stage projects, we seek outsized returns—returns multiple times Bitcoin’s appreciation, such as five or even tenfold. That’s the VC goal, though success rates are low, typically under 20% across the industry.
Out of 100 projects, maybe 80 fail, but the remaining 20 might generate multiples of return. Overall, the final portfolio return could exceed Bitcoin’s price increase.
Bonnie: You mentioned VC investment strategies have evolved. Can you elaborate on the differences between past and present approaches?
Jademont:
Past investments were more casual because there were too many projects in the space. For example, at last year’s Bitcoin Asia Conference, 40–50 exhibitors were tiny startups raising just $1–2 million. They engaged with markets too early—they should have focused first on product development.
Now, with far fewer startups, we have more time to deeply analyze each project, and our investment sizes are larger. Previously, we cast a wide net; now, we prioritize quality.
Bonnie: Besides Hyperliquid and Polymarket, what other trends are you watching?
Jademont:
We’re particularly bullish on two directions. First, innovation around Bitcoin or similar DATs—such as using DeFi to provide value-added services for these reserve assets. Major cryptocurrencies like Bitcoin and Ethereum are increasingly linked to traditional capital markets. The opportunity lies in helping these assets appreciate beyond natural price increases—generating additional yield. This market could reach $2–3 trillion.
Bonnie: What might the future look like?
Jademont:
Imagine a DAT company holding $100 million in Bitcoin. If those Bitcoins sit idle in custodial wallets, that’s a wasted resource. But if, under secure conditions, they earn 5% annual yield via DeFi, the company gains an extra $5 million yearly—a remarkable return by traditional corporate standards.
Additionally, we can tokenize the company’s shares. Some firms specialize in RWA tokenization—putting equity on-chain and integrating it into DeFi. This way, investors benefit not only from Bitcoin’s price rise but also from DeFi-generated yields.
Bonnie: If a corporation holds 50,000 BTC, would it confidently deploy those assets into DeFi protocols to earn yield?
Jademont:
That’s a great question. Personally, I’d be very cautious—I wouldn’t put all my Bitcoin into DeFi. But today, many secure solutions exist. For example, Bitcoin’s Layer 1 supports smart contract-like scripting, such as Hash Time-Lock Contracts (HTLC), which securely lock Bitcoin. Historically, there have been no thefts from such mechanisms.
Jademont:
Of course, no system is 100% secure, but these technologies are as safe as custodial wallets. Other solutions involve multi-sig custody by major exchanges or custodians, locking Bitcoin into protocols to boost TVL. The value of liquidity isn’t just sending Bitcoin to get yield. We can use multi-sig to ensure my Bitcoin won’t be sold for the next decade—this commitment itself has market value, so why shouldn’t I earn yield? Such BTCFi models ensure Bitcoin’s absolute safety while generating extra returns.
Predicted Bitcoin at $100K Ten Years Ago?
Bonnie: What exactly happens at OG gatherings? Outsiders imagine you whales meet up, discuss Bitcoin’s future, and then those predictions magically come true. Is that accurate?
Jademont:
It’s kind of funny—we actually boldly predicted Bitcoin would hit $100,000 over ten years ago, or even earlier. Back then, Bitcoin was maybe worth a few hundred or a few thousand dollars. We said it would reach $100K, but deep down, we weren’t fully confident. We just dared to say it—after all, we had nothing to lose, right?
Over time, as Bitcoin actually reached $100,000, the so-called OG group has started to diverge. Some exited when Bitcoin hit $10,000; others sold off at $100,000. Despite being early adopters, they may not hold much Bitcoin anymore.
And no one publicly reveals how much Bitcoin they actually hold. Being in the space long doesn’t guarantee large holdings—some newcomers with strong capital might buy massive amounts upfront. So I believe judging whether someone is an OG isn’t about their Bitcoin quantity, but their faith and philosophy.
For example, when Bitcoin was $10,000, did you believe it could reach $100,000? Now it’s there—do you believe it can go to $1 million? Do you see Bitcoin as a quick wealth tool, or as embodying decentralization ideals? At this conference, there’s a booth selling memorabilia, including a magazine called the “Freedom Issue.” I highly recommend collecting it. Its cover tells the story of Ross Ulbricht, founder of the original Silk Road. This reflects the themes discussed in the Bitcoin community a decade ago—when Bitcoin was nearly worthless and many thought it might go to zero, yet it carried ideals of decentralization and freedom—something worth reflecting on.
Those who’ve truly held Bitcoin for over 10 years no longer focus on price. They believe Bitcoin hitting $1 million is inevitable—there’s no need to debate price anymore. Instead, discussions center on ecosystem development: Is mining still worthwhile? Are there risks? With rising energy consumption in mining, new issues emerge. What impact does long-term storage in cold wallets have, as on-chain activity declines? Why is Bitcoin’s Lightning Network growing so slowly? How should BTC Fi and Layer 2 technologies advance next? These are the real topics OGs discuss today.
Why Can’t Stablecoins Work Like Bitcoin?
Bonnie: Why can’t stablecoins operate like Bitcoin?
Jademont:
Decentralized stablecoins can indeed achieve Bitcoin-like functionality, but centralized stablecoins (like USDT) have limitations—for example, they can freeze accounts. This poses problems for transactions between AI agents, which don’t want human interference or control.
Imagine an AI agent with its own “sovereign consciousness,” aiming to profit. Say it helps complete a $1 million transaction today and earns $100. That money goes into its own wallet—perhaps a Bitcoin address or a stablecoin address. It uses these funds to buy more data on AI marketplaces, enabling self-improvement, earning more, and boosting competitiveness in the AI world. In this context, Bitcoin and blockchain become the foundational currency and infrastructure for the AI economy.
Bonnie:
This idea is fascinating. How soon might we see this happen?
Jademont:
Actually, it’s already happening. Projects we’ve invested in have solved payment issues between AI agents and are piloting with multiple AI companies in Silicon Valley. However, I can’t pinpoint exactly when this will become widespread. Frankly, I hope it doesn’t arrive too soon—because overly powerful AI threatens human purpose. Yet this trend is unstoppable—we must prepare for its arrival.
I can’t predict the exact timeline, but we must prepare as best we can. Just as Bitcoin emerged after the 2008 financial crisis to prevent similar collapses and build new financial infrastructure, today, blockchain and Bitcoin have already significantly improved traditional banking and finance.
The Truth About Earning Yield on Bitcoin
Bonnie: If I deposit Bitcoin on a platform and you give me 5% yield, that sounds strange. Why should I earn yield just for holding Bitcoin? Wasn’t this previously done by issuing a new token?
Jademont:
Yes, that model existed before last year. It could attract users or market attention short-term, but it wasn’t sustainable. Why? If you deposit Bitcoin with me, and I give you a token I issued, I must ensure that token retains long-term value—otherwise, the model collapses. But maintaining value for a self-issued token is extremely difficult, so this approach has gradually faded.
Now, the mainstream method generates yield through actual usage of deposited Bitcoin. For example, I can deploy Bitcoin into quant trading on exchanges. Such arbitrage strategies are typically stable—as long as the exchange itself is sound (e.g., Binance or OKX doesn’t collapse or get hacked), my funds remain safe. With reliable trading strategies, achieving 5% annual yield isn’t hard.
Another way is using your Bitcoin as liquidity support. Suppose I’m a new blockchain—your Bitcoin boosts my TVL. In return, I offer airdrop rewards, possibly multiple tokens. As token diversity increases, even if some tokens lack value, others might—and overall, you still gain yield.
A third method is using your Bitcoin as collateral. I can borrow against it—say, borrow USDT—then invest that USDT to earn returns. In short, as long as you deposit Bitcoin with me, I can always find ways to generate profit from it.
Bonnie: These operations seem intuitive for native crypto users, but how would you explain them to institutions? Say Michael Saylor were here—how would you pitch this to him? Would he accept it?
Jademont:
Michael Saylor has already embraced these methods. His company is exploring BTCFi—for example, Marathon Digital has formed a dedicated team developing BTCFi products called Lemonade. It’s a Bitcoin Layer 2 solution, and they’re actively participating.
Of course, some traditional DAT companies haven’t fully adopted this yet. It’s a gradual process. For instance, if you hold 50,000 BTC, start by testing with 5,000. If results are good, scale up gradually.
Across the Bitcoin ecosystem—or among OGs—the vision is ultimately to have 10% of Bitcoin actively used, not just stored in cold wallets waiting to appreciate. If Bitcoin sees broader usage, its value grows—say, via Layer 2 Lightning Network payments. If all 21 million Bitcoins joined the Lightning Network, its payment capacity would be immense. Ultimately, Bitcoin can enter DeFi via Layer 2 or bridging, making the largest crypto asset truly active and driving broader crypto ecosystem growth.
Risks of Keeping Bitcoin in Cold Wallets?
Bonnie: You mentioned keeping Bitcoin in cold wallets carries risks. What exactly are those risks?
Jademont:
If Bitcoin remains long-term in cold wallets without use, its social value drastically declines. Bitcoin’s price rises due to collective consensus, but if it’s merely stored without real-world application, it feels somewhat “empty.” In reality, if 10% of Bitcoin became active, it could solve many practical problems—cross-border payments, international trade, or serving as collateral in DeFi, providing ample liquidity to Ethereum or EVM ecosystems. This would not only drive industry growth but let Bitcoin fulfill its purpose—moving beyond mere number games.
For many OGs, Bitcoin surpassing $100,000 may not matter much—adding another zero doesn’t change their lifestyle. But if a decentralized economic system can flourish and even replace parts of traditional finance, that would be truly exciting—not just wealth growth, but the emergence of an entirely new economic order.
Bonnie: You mentioned gold and Bitcoin as base assets. Bitcoin in cold wallets serves as store-of-value and doesn’t need to transact. Cross-border payments can use USDT, DeFi can use Ethereum—so why must Bitcoin play a role?
Jademont:
Gold actually has high trading volume. If every newly issued dollar-pegged stablecoin required Bitcoin backing, Bitcoin would gain a major use case and require frequent on-chain transactions. For example, using Bitcoin as collateral to issue stablecoins would dramatically increase Bitcoin’s on-chain activity.
As for why Ethereum or other assets can’t serve as collateral—it’s hard to explain clearly. But just as central banks hold gold instead of silver or copper, it’s a global consensus. Bitcoin is widely seen as the most reliable base asset.
Bonnie: If payment use cases become widespread, it bypasses the SWIFT system. Would Visa and Mastercard feel threatened? How are they doing now—declining, or starting to partner with stablecoin payment providers?
Jademont:
Visa and Mastercard certainly face competitive pressure. My view is, the U.S. may intentionally be building a parallel trade and payment system outside SWIFT. SWIFT relies on banks for settlement, which brings inefficiency and high sanction risks. For example, during the Russia-Ukraine war, Russia was cut off from SWIFT, unable to spend abroad—exposing SWIFT’s weaknesses.
But precisely because SWIFT is so dominant and frequently imposes sanctions, many countries seek alternatives. For instance, China and Russia trade via barter, bypassing bank systems. The U.S. realizes SWIFT usage is declining, and some nations are preparing countermeasures—so it’s rushing to build a new system to maintain leadership.
In popular tourist spots, many Russians no longer use bank cards but turn to cryptocurrency. Countries like Iran, Turkey, and Russia commonly use USDT in international trade. While the U.S. can’t fully ban USDT, it can regulate stablecoins to keep them under American control. This is one reason the U.S. supports stablecoin development—the other is using stablecoins to further cement the dollar’s global dominance.
Which Countries Use Cryptocurrency for Transactions?
Bonnie: Do you think other countries still have a chance to catch up? Is launching local stablecoins feasible?
Jademont:
This is complex. In 2017, mainland China attempted to launch RMB-pegged stablecoins when regulation was looser. We had a project called Bitshares, allowing crypto-collateralized stablecoins like bitUSD and bitCNY—bitCNY once reached a scale of several billion RMB.
But starting in 2017, China tightened regulations. We received warnings not to issue RMB-pegged stablecoins, as it conflicted with national strategy. We had to halt the project, and many exchanges delisted RMB trading pairs. Since 2017, the RMB has lost influence over crypto and Bitcoin pricing—a regrettable outcome.
For other countries, given their smaller currency scales, launching local stablecoins may not be meaningful. However, I’ve heard rumors of offshore RMB stablecoins possibly launching in Hong Kong—though this hasn’t been officially confirmed.
Bonnie: Your story reminds me of this Bitcoin conference. We invited Eric Trump, who asked whether there’s a Bitcoin community in Asia. I was shocked—hearing that question—because Bitcoin’s computing power was once over 70% concentrated in China.
Jademont:
Exactly—peak concentration reached 76%. But after China’s 2021 ban, Bitcoin’s hash rate dropped to 5%. Now it’s rebounded to over 20%. In fact, prior to 2017, Shanghai—not New York—was the global center of blockchain. Founders of major projects often came to Shanghai for funding—Ethereum, ICP, and others.
Bonnie: Now everyone talks about Wall Street, as if all major events happen in the U.S. How should Asia respond moving forward?
Jademont:
An interesting question. Asia’s future path isn’t something I can decide—I naturally wish to return to past prosperity. But I’ve had frustrations with Chinese policy, as we once had a thriving environment in Shanghai, forcing us to relocate operations to Hong Kong. Later, I discussed this with an American friend whose insight struck me: He suggested that if China had continuously supported Bitcoin since 2017, the U.S. might not have pushed Bitcoin so aggressively, and Bitcoin’s price might not have reached current levels.
The U.S. indeed accelerated Bitcoin’s rise and development. If China had maintained 70% of Bitcoin’s hash rate, the U.S. might have hesitated to fully endorse Bitcoin. While history can’t be rewritten, China’s policies objectively advanced Bitcoin’s decentralization. Yet now, a new trend emerges—Bitcoin becoming increasingly centered in the U.S.
This worries some OGs, especially as Texas’ hash rate grows rapidly and major mining firms are U.S.-based. However, many miners in Texas are actually Chinese—they won’t blindly follow U.S. government orders.
In contrast, Ethereum faces greater security risks due to its POS mechanism. If a government regulates companies holding large amounts of ETH, Ethereum’s network security could be compromised.
Ethereum’s Hidden Risks and the Ideal of Decentralization
Bonnie: Can you explain Ethereum’s security issues in simple terms? What happens in the worst-case scenario?
Jademont:
Ethereum uses a POS mechanism, where network security relies on voting by ETH holders. The more ETH you hold, the greater your influence. If a proposal gains enough support, it can alter the network’s operation.
Imagine an extreme case: If 99% of Ethereum were held by a few large corporations—say, public companies—they could control the network. If they acted maliciously, they could theoretically threaten network security. Though the likelihood is low—since it would harm their own interests—this centralization risk still concerns advocates of decentralization. They want a system with no possibility of malice, not one relying on certain “good actors” to maintain safety.
This is actually Bitcoin’s original design principle: ensuring security through technology itself, not dependence on human moral constraints.
Bonnie: It sounds like you’re cautious about Ethereum’s treasury companies?
Jademont:
I wouldn’t say I fully oppose them—I hold both Bitcoin and Ethereum, roughly 8:2. Treasury initiatives did boost Ethereum’s price, which I welcome. But as an early blockchain participant, I care more about the ideal of decentralization—reducing possibilities of malice and building a fairer system.
In the West, especially Silicon Valley, there’s a view that blockchain and Bitcoin ultimately serve future AI. AI can’t use government-issued currencies like RMB or USD, since they’re centrally controlled. But Bitcoin is decentralized—it can serve as a payment tool for AI, evolving alongside AI networks.
Bonnie: So in the future AI world, my AI agent and yours might transact in Bitcoin, while we humans remain completely unaware?
Jademont:
Exactly. We’ve invested in a project using the Lightning Network to enable payments between AI agents. For example, my AI assistant needs to book a ticket but lacks direct authority. It might contact another AI agent for help, paying a service fee—settled in Bitcoin.
In this way, AI-to-AI transactions operate entirely independently of human intervention. We might not even know such transactions are occurring—this is one possible future of blockchain and AI convergence.
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