‘Old money has all but fled,’ Huobi co-founder discusses challenges of running $400M VC fund

In a brand new Twitter post dated Dec. 12, Du Jun, co-founder of cryptocurrency trade Huobi World, shared new perception on his expertise of operating ABCDE Capital, a $400 million Internet 3.0 enterprise capital (VC) fund, in June this 12 months. In line with Jun, the thought for ABCDE Capital got here in March, and by April, it was already registered in Singapore. Nonetheless, amidst the $40 billion Terra Luna implosion in Might, Jun stated that “previous cash has all however fled” after the incident.

We selected to begin @ABCDECapital on the most tough time of the market. Hope to convey a glimmer of sunshine to builders and convey extra equity, innovation and energy to crypto trade. https://t.co/GmxFFsG7qL

— Du Jun (@DujunX) June 17, 2022

Undeterred, Jun continued that in August, the VC fund was absolutely operational, with “just a few companions pooling tens of hundreds of thousands of {dollars} to speculate.” Whereas an preliminary report early November revealed “superb” outcomes, Jun stated that the following collapse of FTX was “far past expectations” for the trade:

“Layoffs, wage cuts, and contraction turned major themes for crypto corporations. One thought the feud between FTX and Binance would encourage wholesome trade growth, nevertheless it turned out FTX was so weak that it simply straight-up surrendered, bringing a wave of disaster. At present Binance has over 75% market share, and whether or not he likes it or not, CZ’s [Binance CEO Changpeng Zhao] perspective in direction of regulation represents that of the complete trade, and it is an enormous problem for CZ.”

With regard to decentralized finance, or DeFi, Jun attributed final summer season’s increase to quantitative easing (QE) measures of the U.S. Federal Reserve. Tying it to regulation, Jun stated that DeFi progress passed off largely on account of corporations corresponding to Coinbase, Circle, Grayscale, and Paxos “actively embraced regulation” and allowed giant institutional traders to enter the area towards the backdrop of QE.

“FTX’s implosion made conventional previous cash and authorities companies afraid, and even disgusted, by the chaotic and orderless realm of crypto. For a very long time thereafter, governments wouldn’t help relaxed insurance policies that help growth and innovation in crypto, nor would sovereign wealth funds make investments available in the market.”

Jun additionally revealed that since ABCDE Capital started investing in August, the agency has since amassed seven corporations in its portfolio within the safety, knowledge, social, zero information, and nonfungible tokens sectors. “ABCDE solely invests in 15-20 companies per 12 months; a superb agency is just not afraid of the bear market, referrals are welcome, let’s proceed!” wrote the co-founder.