Decoding the Investment Landscape of the Encryption World: The East-West Perspective Debate

In the field of cryptocurrency and blockchain, the investment landscape is undergoing profound changes. Some well-known Chinese venture capital firms are facing challenges, while Silicon Valley giants like a16z remain strong. This contrast reflects the different roles and strategies of the East and West in the world of encryption.

A well-known Chinese venture capital firm, due to losses in BTC L2 investments, has decided to enter the post-investment phase after accumulating an investment of 40 million USD. This is not an isolated case; as early as 2023, several Chinese venture capital firms have begun to transform or shrink their operations. In contrast, a16z has not only remained active in the encryption field, but its AI fund has also raised 20 billion USD, and its encryption fund size once exceeded 7.6 billion USD.

This difference reflects a reality: the West excels in concept issuance and capital concentration, while the East plays a role in project development and providing liquidity. Although some Asian exchanges still possess substantial liquidity, the entire industry is pursuing "internationalization," seemingly viewing the local market as a secondary option.

In terms of technological innovation and regulatory compliance, the Eastern market exhibits a certain degree of lag. This situation is not only present in the Web3 field but also manifests in the traditional internet industry. In recent years, as Chinese concept stocks have cooled, traditional venture capital models are undergoing transformation. Local governments are more focused on "hard technology" and local projects, while the central government is looking at future industrial layout.

The reasons for the difficulties faced by Chinese encryption venture capitalists are complex:

1. Western venture capital like a16z can naturally integrate into the global information capitalism system.
2. Chinese venture capital finds it difficult to directly serve the local market and instead needs to rely on a Western background to compete.

Currently, most internet giants are cautious about Web3, while governments and state-owned enterprises focus more on the underlying technology and take a conservative stance on encryption. The attempts by a few financial institutions in Hong Kong and Singapore are more like strategic defenses.

One reason a16z is able to continue expanding is the global status of the dollar and the leadership of the U.S. market. It can withstand multiple failures until it incubates the next giant company.

In Western history, finance is often seen as a tool for mobilization. The successful cases of the Netherlands and the United Kingdom demonstrate the importance of broad societal participation in financial activities. In contrast, Spain and Portugal missed opportunities due to a lack of this awareness.

The challenges faced by Chinese venture capitalists are not only related to return rates but also how to meet the expectations of LPs. Some investors choose to focus on specific areas, such as trading products, while others place more importance on innovation and personal aesthetics.

The path of future development is not set in stone. Major platforms may evolve into the "lords" of the information age, limiting newcomers in the name of progress. We need new innovators and breakthroughs.

Speculation and long-termism are two different concepts. Some self-proclaimed long-termists may act in ways that are inconsistent with the principles they advocate. True long-termism requires addressing the issue of how to maintain one's existence before results are validated.

The imbalance of roles between the East and the West in the encryption world reflects deeper historical and cultural differences. The key question is whether the new generation of encryption practitioners can leverage local advantages to create public goods for the global market and achieve win-win outcomes on the international stage.