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Tether decided to take action to save the crypto VC industry.
On September 24, the USDT issuer Tether intends to sell about 3% of the shares at a valuation of 500 billion yuan, raising at least $15 billion.
Prior to this, stablecoin track startups raised less than $600 million in 2025, and according to Rootdata data, the overall financing of the crypto industry was only $13 billion.
There is opportunity in crisis. Binance raised US$2 billion in Q1 in 2025, and it was a little quiet in Q2. DAT treasury strategies were popular in Q3. Q4 is expected to compete around Tether.
There has not been a recovery, and it is difficult to raise funds for crypto enterprises, and the dilemma of investing in crypto VCs will continue.
The amount of financing in the first half of 2025 has exceeded the full year of 2024, which does not mean that 2025 is better. 2024 is really bad. According to The Block, in 2024, only 20 VCs accounted for 60% of all LP capital, while the remaining 488 companies divided up the remaining 40%, and the centralization reflects the disorder and intensity of involuntary flow.
The collapse of asset creation system
The 2020 DeFi Summer started in 2018, and the 2025 Perp DEX War originated in 2022.
The Federal Reserve has started a cycle of interest rate cuts. In previous narratives, it will be a positive factor for on-chain and DeFi. The pressure on APR to outperform US Treasury yields is less, so funds will flock to high-yield products such as transactions and lending.
However, if there are still cycles in this cycle, the situation may not be as optimistic as before.
On the one hand, crypto products have been deeply bound to US Treasury and US dollar. For example, the underlying income of a number of YBS (yield stablecoins) is not hedged by ETH, but US Treasury interest + its own subsidy; on the other hand, the valuation system of on-chain assets has actually collapsed, and high FDV has defeated Binance’s main site pricing system, and now only Binance Alpha is left to survive.
Thinking further along the valuation logic, there are only two situations in the crypto industry that make the most money:
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Absolutely small number of participants and relatively high capital liquidity, for example, during the DeFi Summer period, the number of people on the chain was 1,000, and CEX buyers were 100,000-1 million—>Asset creationIt is the most profitable. The wealth-making effect of issuing coins can cover VC investment and project operations. The first-class warehouse $Aave 1,000 times return rate is not extreme. At that time, it was just ordinary.
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Absolutely large number of participants, unlimited capital liquidity, such as USDT, public chain ($BTC/$ETH) and exchange (Binance/FTX/Hyperliquid), the network effects are reduced in turn. Even if calculated based on the 1 billion users of USDT, they are still incomparable to the Internet super application.
At present, home-run, pension funds, sovereign wealth funds and Internet giants will basically no longer invest heavily in the asset creation field, but will consider the scale effect more. This also means that blockchain’s imagination as a productivity technology has reached its peak and can only be regarded as a large financial technology to be valuated.
Correspondingly, the capital market still has fantasies about space (SpaceX) and AI (OpenAI/Anthropic), rather than relying on capacity and computing power to price.
Once an IPO of an crypto company goes public, its valuation will also collapse to financial technology, and the market’s verification of network effects continues to change.
For example, Circle’s USDC issuance is at the $70 billion level, Tether’s $170 billion is its 1.7x, but Tether’s valuation of $500 billion is 16x with Circle’s current market value of 30 billion.
For example, Coinbase’s six pre-listing financing rounds totaled about US$500 million, far less than Binance’s single financing amount this year.
If the BTC/ETH market value is calculated, we will come to a conclusion that crypto projects with super-strong scale effects do not need to be listed, but this is obviously not in line with the current trend. DAT, ETF and IPO are already the current methods of exiting VCs and projects that are unattainable.
Continue to subdividing, the strong cycle of asset creation from 2017 to 2021, the crypto VC’s fame and fortune period has won the golden elixir period, but after 2021, the situation has changed rapidly, and the exchange has become the main axis of industry development, especially the battle between FTX and Binance has attracted everyone’s attention, including the regulatory industry.
Asset creation quickly turned to oriented trading, and the core of all competition is the currency listing effect. The hot financing and upward effects of CeFi and the counterfeit season are all spillovers of the exchange’s dominant position, but the collapse of FTX in mid-2022 changed everything. VC’s defeat by 2024 has become a decent exit.
Perhaps, oriented transactions are precisely the by-product of the FTX collapse in 2022. Hyperliquid seized his own opportunity and rejected VC investment is just an excuse. Embracing market makers and institutions is the main axis. In the $USDH canvassing stage, No Limit Holdings/Infinite Field/CMI has “self-exploded” to participate in HL market making.
Before the 2025Q3 DAT completely broke out, Galaxy Research counted the financing situation of Q2, revealing that companies established in 2018 accounted for the majority of the funds raised, while companies established in 2024 accounted for the largest share of transactions, i.e.Start-ups can try to get small funds, but large amounts of funds flow to companies that have been verified by the market. More Crypto is the “travel cycle”.
Money eventually flows to the cows who are not short of money, and bitterness eventually flows to the horses who can endure hardships.
However, after Scroll “runs away”, the technology Infra entrepreneurial season has basically ended. The concept stacking of ZK+ETH+L2 cannot guarantee returns, and there must be nothing to guarantee the future.
To make matters worse, the current flow does not mean that tomorrow will be OK. For example, Perp DEX will start in 2025, but if it is not invested in 2022, there is no meaning to follow up now. The war to lead transactions has ended, and this will not be the market consensus in the future.
Binance will have direct contact with all retail investors. Hyperliquid doesn’t mind outsourcing the front-end to Phantom. Liquid is its own moat, and the network effect has been changing.
At this point, we can piece together the out-of-focus of industry development and VC investment. The crypto industry is too cyclical compared to the traditional Internet industry, and can run a small cycle in 2-3 months. However, VC investment in Infra often takes 2-3 years to achieve results, which means that after at least 10 small cycles, the VC investment track will become the mainstream of the current period, and the projects invested by VC must become the mainstream of the track, and the double hit is comparable to a roller coaster.
Impact of oriented trading system
The collapse of valuation logic requires a long period of reshaping.
Perhaps everyone is a VC, and perhaps M&A is also an exit.
Currency has time costs, VC is the advance funder with first and second level information differences, and the liquidity of information is eventually exchanged for excess profit. Classic IPOs or Binance main stations are promised places where money and coins are flowing, but now they either help the project IPO or turn left to Alpha, one thought of heaven and one thought of hell, ABCED will close down directly.
Whether it is DAT, ETF or mergers and acquisitions, the role of VC is no longer a “dreammaker”, but more like a funding provider. For example, this year, DAT raised a total of US$20 billion (not calculated Strategy), but Peter Thiel’s US stock ETH, Huaxing can only buy BNB in Hong Kong stocks, and Summer Capital can only be the manager of $SOL DAT.
This is actually not normal. Trading is concentrated in BTC/ETH, and DAT has begun to spread to small currencies. Perhaps copycats are a rigid demand. There are more ways to play outside of the first level. The only problem is that most DAT and VC funding parties cannot manually create a 1,000-fold return rate.
The deeper crisis is that financing does not necessarily require VC participation, especially non-US VC participation. Polymarket acquired CFTC-registered exchange QCEX and returned to the US market, Tether launched the Genius Act compliant stablecoin USAT to return to the US market, and ETFs and DATs also basically occurred in the US stock market, and it is also the US market.
Directed transactions are no longer a competition between better matchmaking engines, but rather a maturity of capital operations. The so-called compliance exchanges are more like the entry threshold for newcomers, and the courtyard and high walls charge high handling fees.
In addition to financing, industry brands themselves have also begun to couple with each other, reflected in the 2024-2025 merger and acquisition cycle, Coinbase acquires Deribit to fill the options market, Phantom acquires wallet tool Bitski, security product Blowfish and trading tool SolSniper, and even Stripe are also acquiring wallet service Privy and stablecoin tool Bridge.
Whether it is Coinbase’s Everything Exchange vision or Hyperliquid’s House All Finance slogan, it is no longer of great significance to distinguish CEX and DEX, and the focus of trading is no longer to link with retail investors, but to provide more mainstream or long-tail trading options, as well as liquidity!Liquidity or liquidity!
Therefore, Coinbase will bind Circle to issue USDC. Hyperliquid wants to play $USDH by itself. What it values is not the scale effect of stablecoins, but the customer acquisition and retention ability of stablecoins. This is the biggest difference between them and USDT.
VCs view USDT’s perspective. Although investing in Tether is expensive, it is stable and profitable;
USDT This time, fundraising:
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Open up fundraising during low interest rates, use external funds to develop their own diversified businesses
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Give Chuanbao related entities the opportunity to enter, refer to Binance to complete financing and use USD1
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It is expected to deal with more tragic stablecoin competition, especially YBS’s profit sharing mechanism, which requires both blocking Circle and Ethena
Directed transactions have become the common feature of capital flows in 2025, but this is not the future. DAT, capital allocation, LP, stablecoins, and RWA all lack imagination. Participating in Perp DEX or stablecoins are all choices for workers who are ineffective.
VC is a manual work after all, and must bet on future “feelings” and “trends” to disenchant underlying technologies, network effects, and current hot spots, and seek PMF in a long period of time.
Thousand times of return depends on the next “global application”. What else is there outside stablecoins, exchanges and public chains?
The mining industry has reached the critical point. The future of mining is a data center, or changing the Bitcoin economic model. Simply put, it is to collect transfer fees. Unlike transaction fees to maintain the Bitcoin network, the transfer fees protect the interests of users.
All aspects of oriented transactions have been in the circle of existing giants. It is almost impossible to challenge Coinbase, Hyperliquid, and Binance. It is more feasible to engage in peripheral activities around them or become part of their ecosystem.
It is worth noting that the strength of exchanges and market makers is an illusion. They are only effective in the Binance ecosystem. They have also become weak in higher-dimensional capital flows. Market makers are not strong in dimensions such as ETFs, DATs and M&A, especially the secondary return rate of BTC/ETH. Exchanges and market makers are not smarter than others.
If you keep your enthusiasm for stablecoin financing, the only question is how they are ready to fight the first-mover advantage and network effects of USDT, which is not a difference in amount of funds, but a change in consumption behavior.
Traditional Internet can burn money to exchange for markets, take out taxis, takeout, and live locally, but how can people switch financial assets? I haven’t thought of a good solution yet. In the current embarrassing situation, oriented transactions will not be the focus of future innovation, but we have not yet come up with interactive forms other than transactions.
Conclusion
The crypto industry is undergoing fission and must go beyond the Fintech valuation framework and embrace global applications to have a future. But now we are at the forklift. Will the future be more, more frequent, and more mainstream transactions, or a wider use (blockchain, stablecoins, RWA, Web3)?
A pre-summary of the VC industry in 2025:
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Cycle breaking, trading mainstreaming (BTC/ETH), investment centralization
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Crypto-encrypted enterprises are difficult to raise funds, crypto-encrypted VCs are difficult to raise funds, and the valuation system collapses
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From investment to capital allocation, the intermediary attributes have been enhanced and the interaction with the secondary market has been reduced.
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Spindle scattered, Q1 Binance, Q2 scattered, Q3 DAT, Q4 stablecoin
The situation is very similar to the collapse of the crypto bubble at the beginning of the century. People need to reorganize old mountains and rivers. Facebook, Google and Apple are all products after the summer of the bubble. Maybe countercyclical investment looks at Arthur Hayes?
In a word,We need Peter Thiel of the crypto era, not a16z of the internet era.
