.jpeg)
Web3-focused investment fund ABCDE has announced a halt to new investments and fundraising efforts, citing concerns over the current trajectory of the cryptocurrency market. Despite this pause, the $400 million fund remains committed to supporting its existing projects and ensuring their success.
Key Takeaways
-
ABCDE will not pursue new investments or fundraising for its second phase.
-
The fund will continue to support existing projects and focus on long-term value creation.
-
Concerns about the short-sightedness of many current projects in the crypto space were expressed by co-founder Du Jun.
Background on ABCDE Fund
Founded with a capital of $400 million, ABCDE has made significant investments in the Web3 and blockchain sectors. The fund has allocated its resources as follows:
-
28% in Bitcoin scaling technology
-
16% in Ethereum liquid staking derivatives finance (LSDFi)
-
12% in Layer-2 solutions and smart contract platforms
Over the past three years, ABCDE has invested more than $40 million across 30 projects, maintaining a strong internal rate of return (IRR) despite the challenging market conditions.
Recent Developments
The decision to halt new investments comes shortly after ABCDE's last investment in the Ethereum layer-2 solution, Soon, which raised $22 million through a non-fungible token sale. The Soon mainnet claims to outperform Solana in terms of speed and efficiency, with average block times of just 50 milliseconds.
Du Jun, co-founder of ABCDE and founder of the Huobi exchange, stated that his focus will shift from financial investments to strategic investments and deep incubation, emphasizing the importance of industrial synergy and long-term value creation.
Market Concerns
In his announcement, Jun expressed his growing concerns about the current state of the crypto market. He criticized many projects for their short-term focus, prioritizing quick listings on exchanges over sustainable development. He noted:
"Many projects are extremely short-sighted and only think about how to get listed on the exchange as soon as possible, and what is left behind is often a mess."
Jun's remarks reflect a broader sentiment in the industry, where the emphasis on immediate market performance often overshadows the fundamental value of projects.
Future Directions
Despite halting new investments, ABCDE is not facing financial constraints. Instead, the decision is rooted in a desire to foster a healthier ecosystem within the crypto space. Jun's new incubator brand, Vernal, is set to launch its first batch of projects in May, indicating a shift towards nurturing projects that align with his vision for sustainable growth.
Conclusion
The pause in new investments by ABCDE highlights the ongoing challenges within the cryptocurrency market. As the industry grapples with volatility and a focus on short-term gains, funds like ABCDE are taking a step back to reassess their strategies and commitments to long-term value creation. This move may signal a shift in how investment funds approach the rapidly evolving landscape of Web3 and blockchain technology.