The Birth of ABCDE Capital
In the wild world of cryptocurrencies, it’s not uncommon for fortunes to be made and lost in the blink of an eye. Du Jun, the co-founder of the cryptocurrency exchange Huobi Global, shared his journey of launching ABCDE Capital, a substantial $400 million Web3 venture capital fund. The inception took place in March 2022, and within mere weeks, the fund was officially registered in the sunny city-state of Singapore. Talk about fast-tracking!
Timing is Everything (Except When It’s Not)
But just as every good hero faces a dark moment, so too did Du, as the infamous Terra Luna collapse unfolded in May, wiping out a jaw-dropping $40 billion. Du candidly remarked that “old money has all but fled,” meaning traditional investors were hitting the panic button. You’ve gotta wonder if someone sent them a memo about the crypto apocalypse!
Betting on the Underdog
Despite these challenges, Du remained undeterred. By August, ABCDE Capital was up and running, with partners pooling ‘tens of millions’ for investment. News early in November hinted at positive results, suggesting that perhaps this venture was a beam of hope in an otherwise bleak industry landscape. But then came the FTX fiasco – the plot twist everyone was talking about!
Carnage and Chaos: The FTX Fallout
Jun described the fallout as “far beyond expectations,” bringing layoffs, salary cuts, and a grim reality check for crypto companies everywhere. Remember that brief optimism about healthy competition between FTX and Binance? Well, it turns out FTX was the proverbial house of cards that tumbled down, leaving Binance in an overwhelming dominant position with over 75% of market share. Meanwhile, CZ’s (Changpeng Zhao, Binance CEO) regulatory stance now represents the entire industry’s future, but let’s be honest—this is one hot potato!
In Defense of DeFi
As if this wasn’t enough drama for one season, Jun then pivoted to the realm of decentralized finance, or DeFi. He attributed its summer boom to the Federal Reserve’s quantitative easing measures, which effectively pumped up the crypto balloon. He further hinted that companies like Coinbase and Grayscale played a crucial role in legitimizing the space. Unfortunately, after the FTX debacle, many traditional investors and government agencies recoiled in horror.
Building the Future Amidst the Chaos
Since launching ABCDE Capital in August, the firm has successfully invested in seven companies across sectors like security, data, social, and non-fungible tokens (NFTs). Du proposes that despite the turbulent market, only 15-20 investments are made each year, emphasizing quality over quantity. Let’s not forget: a good firm thrives even in a bear market. So if you have a recommendation, Du is open for business!
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