Author: TVBee

The contradictions of the "Shanzhai Season" and the redundancy of VC coins

Actually, the 2025 knock-off season came before.

Around May to August 2025, BTC will rise while its market share declines. During this period, altcoins will see their market share increase.

BTC is rising, but the total market capitalization of altcoins is growing even more – this is the altcoin season.

Redundancy of VC Coin

The paradox of the "Shanzhai Season" is that while its total market value is growing, the market seems completely unaware of its impact.

This is because while the total market capitalization of altcoins is growing, there are simply too many altcoins, resulting in most individual altcoins not experiencing a significant price increase.

Therefore, the key issue for the 2025 altcoin season lies in the redundancy of VC coins.

So here's the question: why are there so many VC coins in 2025?

Misalignment of liquidity between the primary and secondary markets for VC coin

The normal approach should be for VCs to invest first, and then for the token TGE to enter the secondary market, where the greater liquidity would drive up the price.

However, this round of market activity has resulted in a liquidity mismatch between the primary and secondary markets.

◆The reason for the redundancy of VC coins is excess liquidity.

In 2021-2022, there was a large amount of VC investment in the primary market, both in terms of investment amount and number of projects.

Financing in other periods is generally concentrated within 1 to 2 months. However, in 2021 and 2022, there was a lot of financing and the duration was long.

We can assume that this is a financing redundancy caused by excess macro liquidity, which is the fundamental reason for the redundancy of VC coins in this round of market activity.

◆The poor price performance of VC coin is due to a lack of liquidity in the secondary market.

However, both the previous M2 annual growth rate and the financing data chart clearly show that market liquidity will decrease after these redundant VC coins TGE in 2025.

This creates a time mismatch between liquidity in the primary and secondary markets. A large number of VC tokens experience excess liquidity during the primary market fundraising phase, while liquidity is scarce in the secondary market phase after TGE.

Of course, there are many reasons for the lack of liquidity in the secondary market, which will be discussed in the next article.

summary

The most critical issue is the liquidity mismatch between the primary and secondary markets for VC coins. This resulted in a relatively large supply of VC coins during the altcoin season of 2025, leading to a relatively large selling pressure and insufficient buying pressure, which naturally resulted in a poor price performance.

Altcoins/VC coins will not disappear

VCcoin's fundraising continues with a relatively cautious approach.

The chart still shows VC funding. It reveals that a significant number of projects still received funding in 2025. However, both the total funding amount and the number of projects are far lower than in 2021. This may be due to relatively tight macro liquidity, but it also reflects the cautious attitude of VCs in their investment activities.

However, it's worth noting that an average of approximately 75 projects received funding each month in 2025. Both the amount and number of VC funding rounds in 2025 were higher than in 2017-2018. This demonstrates that even if we disregard the redundant VC coin funding in 2021, altcoin/VC coin funding is still progressing.

After this bear market ends and VC coin undergoes another TGE, there won't be as many redundant new coins as there were in 2025. Unless macro liquidity remains insufficient, the next round of altcoin market activity will likely fall somewhere between the frenzy of 2021 and the bleakness of 2025.

Web3 finance still maintains a scale of nearly $100 billion.

First, in the financial sector, a large number of TradeFi institutions have joined Web3. This hardly needs further elaboration.

The total TVL (TVL) across the network is currently at $92.831 billion, roughly equivalent to the level in March-April 2021.

Technology companies and Web3 are continuously merging.

✦ Examples of tech giants' involvement in Web3

In non-financial sectors, tech giants are also involved in Web3. For example:

Google is deeply involved in the Hedera ecosystem, serving as a network node and a member of its governing council. Other members of the Hedera governing council include IBM, Boeing, and Nomura Securities. Google has also integrated Hedera's ledger data into BigQuery, allowing developers to query Hedera blockchain data using SQL. (Blockchains are not relational databases and do not support direct SQL queries; they typically require indexing before SQL can be used.)

Google is also a node of Midnight (a privacy-preserving Cardano sidechain) and provides developers with development tools to quickly deploy Midnight nodes using Google Cloud.

Nvidia recently facilitated a collaboration between its AI development platform Brev.dev and the dePIN project Akash. Developers can choose to use Akash's computing power when developing AI on Brev.dev.

Microsoft directly developed ION, a two-layer DID network for Bitcoin.

Telegram dominates the TON ecosystem.

Sony directly launched Soneium, an L2 entertainment infrastructure...

✦Examples of Web3 services serving Web2 and AI

On the other hand, some Web3 projects are also serving the Web2 domain and AI. For example:

Bittensor subnets provide incentives for AI development and promote the growth of the AI ecosystem.

Aethir serves hundreds of enterprise clients, including those in cloud gaming and AI.

VeChain serves companies such as Walmart and BMW, providing them with on-chain traceability services.

Polkadot also serves some enterprise or institutional clients, such as the Polytechnic University of Milan...

summary

VCs are still investing in Web3, which means that VC projects still have some funds and motivation to carry out technological innovation and product development... Moreover, the number and amount of VC investments are higher than in 2017 but lower than in 2021, which reflects the cautious growth of VC investment.

The integration of finance and Web3 is evident in various fields, including DeFi, RWA, and stablecoin payments. Technology institutions are also integrating with Web3.

All of this demonstrates that altcoins/VC coins will not disappear.

The US Stock Market Trend of Altcoins/VC Coins

The "Nasdaq-ization" of exchanges

On March 25, 2026, Binance released the "Risk Warning for Crypto Market Makers and Guidelines for Projects and Users".

Among them, five risk behaviors or phenomena of market makers were identified: aggressive selling and unlocking conflicts, one-sided trading behavior, mismatch between volume and price, insufficient liquidity or depth, and imbalance between trading volume and liquidity.

In response to these risks, Binance's measures include:

First, we advise project developers to conduct thorough due diligence, assessment, and monitoring before and during cooperation with market makers to effectively manage risks.

Second, regulate project teams. Project teams are required to strictly adhere to the token release schedule, prohibit token activities that disrupt the market, promptly disclose market maker information to the platform, refrain from colluding with third parties to manipulate prices or liquidity, rigorously screen partners, clearly define executable operations when agreeing on contracts with market makers, and continuously monitor market maker behavior after launch.

Third, the platform continuously monitors and manages market makers. Binance pledges to "continuously monitor market-making activities and take swift and decisive action against any violations, including blacklisting violating market makers."

From then on, Binance, while accepting regulation and adhering to legal and compliant practices, further played a regulatory role in ensuring the health of the market, making the platform more like a "Nasdaq".

In the stock market, exchanges like Nasdaq are not only platforms for issuing and trading stocks, but also deeply involved in market regulation.

Cryptocurrency exchanges, however, typically only fulfill the latter function: serving as a platform for token trading. Token issuance is based on blockchain technology. This is one of the bottlenecks for cryptocurrency exchanges, making it difficult to regulate token issuance, on-chain circulation, and trading.

As the world's largest exchange, Binance's constraints and regulations on market makers will have a very positive impact on the crypto market, helping to protect the rights and interests of retail investors.

As a leader in the crypto industry, Binance's actions are likely to garner more support from platforms, projects, and users, and more platforms will likely adopt Binance's market maker management strategies. This means that the crypto market as a whole will tend towards a "Nasdaq"-like structure.

This is a more favorable, healthier, and more promising future for retail investors.

The trend of altcoins becoming more like US stocks

Regarding token issuance: With the increasing involvement of traditional financial institutions and tech giants, coupled with more cautious VC investment behavior, it's highly likely that only relatively high-quality VC tokens will be issued. The phenomenon of numerous VC issuances of varying quality, as seen in 2025, should be significantly reduced.

In terms of token trading: Binance, as one of the leaders in the crypto market, is strengthening its control over the risky behavior of market makers. Other platforms are likely to imitate and learn from this, which will reduce market manipulation and exploitation in the token trading market, gradually leading to a relatively healthy trading ecosystem more like the US stock market.

From a KOL perspective: As the number of VC tokens decreases, the demand for token advertising will also shrink. Meanwhile, more and more bloggers are joining the ranks of KOLs, and during each bear market, some idle business development personnel begin to transition into KOLs, increasing the supply of token advertising. This means that competition in the token advertising market will intensify. KOLs with more differentiated styles, stronger analytical skills, and sound values are likely to succeed in this competition, which is beneficial to the health of the industry.

From a market perspective: Simply trading based on a four-year cycle may not yield significant returns. The four-year cycle may gradually weaken. BTC may move in tandem with the US stock market to some extent. The concentration of VC coins in TGE may also decrease.

At the retail investor level: the win rate and odds of a trade may be related to one's perception.

Market News: Republican lawmakers’ document does not mention cryptocurrency as a priority

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