Analysis of the Logic Behind VC Coin

Recently, the cryptocurrency market has seen a wave of project enthusiasm led by venture capital (VC). These projects quickly attracted funding through high valuations and market hype, but over time, their appeal has gradually weakened. Investors are starting to shift their attention to other types of projects, such as MEME coins.

The current wave of financing has led to a bubble in the market. A large amount of capital is flowing in, but there is a lack of corresponding technological innovation. Overvalued projects are struggling to meet expectations, while participants attempting to profit through venture capital have further exacerbated the chaos in the market.

In terms of project types, several different patterns can be observed:

1. Projects led by idealists are often difficult to sustain.
2. Some projects are entirely reliant on capital operations, driven by "puppet" founders.
3. Some teams plan from the beginning how to profit from the project and exit quickly.
4. Some projects also work closely with VC to launch short-term profitable projects, aiming to quickly raise funds.

However, there are also some high-quality projects consisting of top scientists and technical teams. For example, teams like Zama and Fhenix that focus on Fully Homomorphic Encryption (FHE) research, as well as projects supported by a well-known investment institution, which may still be active in the industry in the next 3 to 5 years.

There are significant differences in the investment strategies of North American and Asian funds. North American funds tend to support long-term technological innovation, while Asian funds focus more on market effectiveness and short-term returns. This difference reflects distinct investment logic and cultural backgrounds.

For retail investors, it is important to change their investment mindset. In the current market environment, retail investors need to adopt the perspective of the project parties and work with them to profit from VC. By adjusting this strategy, it is possible to achieve good returns even when participating in some projects that are not entirely ideal.

Market analysis shows that there is currently no real "gold mine" in the cryptocurrency space, and most projects rely on the continuous influx of new users. The transactions between many projects are essentially a cycle with no substantial value. In this market, VC itself has become the main "human mine", and those who truly profit are the participants who can collaborate with the project parties to gain benefits from VC.

For ordinary investors, participating in activities such as airdrops and staking can be a relatively low-risk and controllable strategy. By diversifying investments and holding for the long term, stable returns can be obtained.

When selecting projects, investors should be wary of projects with high valuations but low circulation, as these projects often face significant inflation pressure. The distribution of token holding addresses can be checked through blockchain explorers to assess the actual circulation status of the project.

Finally, although Ethereum (ETH) performs excellently in terms of technology and security, making it an ideal project in the cryptocurrency field, it is important to note that technological advantages do not directly equate to an increase in coin prices. Investors should consider multiple factors when making decisions.