Self-statement: Three years as a Crypto VC, suffering losses of tens of millions as painful lessons

Author | BruceLLBlue

Recently, Twitter has been buzzing with a wave of Chinese KOLs posting about "how much they earned in the past year": millions, tens of millions, 102.4 billion (don’t run if you’re just joking)…… After reading, all I can say is, impressive! But as a former VC investment head (GP, General Partner), I just want to complain: after a few years as a Crypto VC, I lost tens of millions of dollars. This isn’t just casual talk; it’s a real blood-and-tears story: over 3 years, 55+ investments, 27 losses (including rugs), 15 went to zero, and I also invested in 9 leading VCs.

Among them, NFT-related projects were a total failure, GameFi had a 33% rug rate, and Infra was a disaster zone, with many projects left with only 10%-20% of their valuation. To the KOLs flaunting their income and esteemed Crypto traders, congratulations on catching the secondary windfall; what about ordinary VCs focused on primary investments? They’re constantly licking project teams; unlocking takes 3-4 years, and the result is often "invested early, invested correctly, but can’t exit." Why show losses instead? Because this isn’t about crying poor; it’s a wake-up call. Being a Crypto VC is inherently difficult; bear markets can be brutal, and bull markets can lead to being "harvested" by project teams. However, I believe that in this new cycle, continuing as a VC (or evolving it) may not be the best timing, even though institutional capital is entering, regulations are clearer, and AI + on-chain tools are reshaping exit paths. I want to share my hard-earned lessons; let’s encourage each other.

Lesson One: The Naked Truth of Statistics, the "Win Rate" of 55 Deals

From joining Crypto VC in August 2022 to leaving in July 2025, I personally managed 55 direct investments + invested in 9 funds.

Rugs accounted for 14/55 (25.45%): The disaster zone was NFT projects, all went to zero. One "star project" backed by a major IP had a booming early NFT phase, but the team had shallow Web3 experience, and the founder, a top celebrity, showed little interest in issuing tokens; after core members left, it soft rug pulled. Another "music + Web3" project, after years of work from a giant, achieved nothing and quietly failed. There was also a Dex project with a "founder's entrepreneurial dream": the founder had the team do unpaid work while pocketing the income; several "promising stocks" from a university lab basically all failed.

Losses accounted for 28/55 (50.1%): One GameFi project, after launching at 5x, fell apart (remaining 20% of cost, down 99%); another GameFi project from a "North American big company background" peaked at 12x, now only 10% of cost; another GameFi project was heavily impacted by a CEX's Launchpad, leading to significant sell pressure, and it directly failed. The Infra sector was even worse: no breakthroughs in ecosystems, no innovations in technology, and after the hype, many were left with only 10% of their cost; without timely hedging, there would be nothing left. Additionally, a MOVE ecosystem socialfi project collapsed right before the bull market in 2024.

What about the fund investments (FoF, fund of funds)? I invested in 9 leading European and American funds like @hackvc, @Maven11Capital, @FigmentCapital, @IOSGVC, @BanklessVC; these funds participated in early investments in very well-known projects during this cycle, such as @eigenlayer, @babylonlabsio, @MorphoLabs, @movementlabsxyz, @ionet, @altlayer, @MYXFinance, @solayerlabs, @ethsign, @0Glabs, @berachain, @initia, @stable, @monad, @etherfi, @breviszk, @SentientAGI. On paper, it looks okay with 2-3x returns, seemingly respectable, but the actual DPI (distributions to paid-in capital) is estimated to be only 1-1.5x. Why such expectations? The main reason is the slow unlocking of projects and poor market liquidity; if a bear market or a collapse like FTX occurs, positions can instantly bleed out.

Lesson Two: The Depth of Pits, the Depth of Human Nature — Several "Heart-Wrenching" Cases

The most painful is the "people investment" failures: a Dex project where the founder, despite having the aura of a CEX executive, actually outsourced work to the team while pocketing the income; the "North American big company dream" of GameFi, which peaked at 12x but never recovered. A certain Infra project from a founder of @0xPolygon has no breakthroughs in its ecosystem and is left with only 15% of its investment valuation; several hot Infra projects launched on the Korean giants (Upbit and Bithumb) and then plummeted without ever rising again. There was even a "music NFT" project where the founder was a Tencent Music executive, who after a few years soft rug pulled, achieving nothing.

VCs in the Chinese-speaking region suffer more: language/thinking patterns/resources are inherently disadvantages; the strategies of European and American funds are fundamentally different. They compete on scale to earn management fees, while we are shortsighted with Quick Flips and Paper hands. Well-known projects, after raising huge funds, seek global outsourcing to implement their roadmaps (I’ve encountered a few; as long as the money is sufficient, it’s fine), and the founders only need to manage the community and raise funds. What about VCs? The most vulnerable group, some project teams offload tokens through airdrops, trading via USB drives and Korean exchanges (after driving up the price at launch to the target price, they share the profits, which is why Korean exchanges often see opening premiums), and investors have no way to verify. Every VC thinks they are impressive; checking the IRR and DPI of these funds shows that it’s better to just do fixed deposits in USDT/USDC.

Lesson Three: After Losing So Much, I Learned the "Exit is King" Evolution Theory

Being a VC is truly difficult; you have to survive bear markets, gamble on human nature, see through people, and wait for unlocks without holding coins. A cycle lasts 3-4 years, and without hedging/liquidity management in the secondary market, achieving excess returns is nearly impossible. From my summary, most projects that achieved excess returns were invested in during the late 2022-2023 period after the FTX collapse. The core reasons are: project valuations were low, founders had strong beliefs, and the timing of investments was right (projects had enough time to explore and could conduct TGE early when the bull market arrived). Why did other projects yield poor returns or losses? The main reasons are: either too expensive, too early, or misaligned unlocks.

Looking back, these are valuable experiences! Moreover, with $BTC continuously hitting new highs, traditional giants and Wall Street are rushing in, the window for ordinary people to get rich is slowly narrowing, and institutional investment returns are aligning more with Web2 venture capital (it’s hard to return to the wild growth era before 2021).

The new generation of investors: they may not necessarily be VCs; they are more likely to be individual angel investors or super KOLs who, through their influence and resources, can often secure better unlocking terms and more favorable pricing than VCs. Moreover, it’s not just about investing early and correctly; it’s about capturing the entire chain: primary + secondary + options/convertible bonds + airdrop interactions + market-making hedging + DeFi arbitrage. In fact, there is a serious cognitive misalignment and difference between the East and West, which is also a gold mine for arbitrage.

Turning to the Keyboard, the Dignified Path of Outputting Alpha Through Content

Losing tens of millions in my Crypto VC years made me realize one thing: constantly licking project teams, enduring token unlocks, and gambling on human nature leads to the humble label of "VC dog" and the grievances of backers, while project teams can secretly offload through airdrops, leaving investors helpless. Enough! Now, I choose to turn around and start writing articles: relying on daily keyboard work to output industry insights and alpha perspectives, no longer entangled in waiting for project unlocks, but directly laying out strategies and capturing project opportunities. Compared to the passive waiting of VCs, this path is more dignified, freely outputting value, with the compounding being the trust and shares from readers.

Ultimately, through these years of experience, I finally understand: patience > opportunity, luck > expertise, FOMO = suicide.