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The Impact of Silicon Valley Venture Capital on the Crypto Industry and Its Boundaries
Nick Tomayno, founder of 1confirmation, reached a very interesting conclusion in his latest analysis: the most successful projects in the crypto market – Bitcoin and Ethereum – have never relied on the financial support of Silicon Valley venture capital. These two projects currently have a market capitalization of over 2.5 trillion dollars, and their dominance in the crypto industry remains unchanged.
Misguided Strategies of Silicon Valley VC Firms
Most Silicon Valley venture capital firms attempted to control the crypto industry between 2021 and 2023. They primarily focused their investment strategies on projects called "zero-sum games" – projects that only redistribute existing wealth without creating new value. As a result, VC firms directed large amounts of funds into low-quality and unprofitable projects.
Consequences of Investment Mistakes
The outcome of this strategy was not gold. Many VC firms faced significant losses, and their reputations were damaged. Excessive advertising and overhyped projects led to a loss of trust among crypto investors. Silicon Valley, traditionally seen as a hub of innovation and vitality, was seriously questioned during this period.
The Path to Genuine Innovation
The historical development of Bitcoin and Ethereum demonstrated a different path. These projects did not require initial investments from any major VC firm. Their success was based on technological advancement, strong community support, and a clear value proposition. Their current value – over 2.5 trillion dollars – was created without the investment activities of VC companies.
Lessons from Silicon Valley Venture Capital
Today, Silicon Valley VC world must acknowledge its failures. The crypto industry is not under VC control but develops through technological innovation and projects that create real value. Venture capital should learn this lesson: investing in zero-sum projects does not change the world; it only causes financial losses.