What will happen when VCs, mining, and MicroStrategy in the crypto world are all struggling?
- First, let's look at VCs
In this bear market, crypto VCs are likely having a tough time, but their struggles are being passed on to each of us.
VCs actually invest a lot; projects that appear to have a high FDV often unlock their tokens early. And don’t think they are living the high life; they are also a vulnerable group. Many project teams delay or reduce unlocks when prices rise, and when prices fall, they often go dark.
Moreover, many top VCs in Europe and the U.S. invest in infrastructure projects, unlike HYPE and others that have cash flow. However, this doesn’t mean these actions are meaningless. Whether it’s public chains, re-staking, or various hardcore technologies, it may seem useless now, but we can’t say that the passionate VCs at that time were foolish—when ETH first came out, Vitalik was a CX leader, and the Bitcoin community dismissed ETH as worthless.
However, those infrastructure projects that haven’t taken off yet, when the project teams and market makers find ways to cash out, VCs often find that by the time they unlock their tokens, they are worth very little.
There’s a joke: at the end of the year, when VCs tally their accounts, if they have lost 80%, they might be among the top performers in the industry because everyone else has lost 95%.
- Next, let’s look at mining
Currently, depending on the type of mining machines, electricity costs, and operational costs, some miners are still making decent profits, some are breaking even, and others are already at a loss—though as long as they can cover electricity costs, they will continue to mine.
A common trend is that mining companies, due to good electricity and infrastructure, are increasingly shifting towards AI, as the trend for AI is strong, while the electricity infrastructure in Europe and the U.S. is lagging behind. Mining companies have become sought after, as transitioning to data centers can yield higher profits.
So, while we are still discussing what to do when mining rewards decrease due to halving, the new situation is: what happens when running data centers becomes more promising than mining?
If miners leave and hash power decreases, Bitcoin might not need to rise to maintain its value.
- MicroStrategy
What role did MicroStrategy play in Bitcoin’s rise from $16,000 to $120,000? It’s not just about buying pressure.
At critical points, such as $30,000 and $49,000, when the market was extremely fearful, didn’t MicroStrategy’s aggressive buying provide support and confidence?
Wouldn’t this support and confidence help the market follow through? After the subsequent surge to $80,000, MicroStrategy continued to buy aggressively—didn’t this bring in ETF buying pressure?
Absolutely, so without MicroStrategy, the current crypto market would be even worse.
When MicroStrategy was at its peak, its trading volume ranked among the top in U.S. stocks, like a perpetual motion machine. But now it is facing a devastating blow, and it is highly likely that JPMorgan will kick it out of the index—this is very likely to happen. After that, it will be difficult for MicroStrategy to maintain those buying pressures, and it will turn into a fund management company. How many people will entrust their money to it?
But all of this is being communicated to everyone:
VCs are no longer making money. Although they invest other people's money and may not feel the pain as much, they will struggle to raise funds going forward. This is why we see so many dissolutions; after all, everyone knows that making money in crypto venture capital is becoming increasingly difficult.
Without VCs organizing deals, the high FDV projects we criticize will also have to lower their FDV, and Binance’s listings will no longer create wealth. Only trash project teams paired with trash market makers will occasionally have minor explosions.
If miners are not making money and face mining disasters, we won’t be doing well either.
If MicroStrategy cools off, then Saylor can only say, it’s not so easy to see me fail; I am invincible. My personal Bitcoin will eventually be destroyed; I am just doing the right thing for my ideals.
When the time comes, the world will unite in strength; when fortune goes, heroes are not free.
Whether you like it or not, change is always happening, and we can only choose to embrace it.
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