Author: Hu Tao, ChianCatcher
Original Title: The Dilemma and Future of Web3 Chinese Entrepreneurs
As the crypto industry becomes increasingly mainstream, Chinese entrepreneurs seem to be moving further away from the center stage.
There was a time when projects founded by Chinese entrepreneurs occupied half of the industry, including well-known cryptocurrency exchanges such as Binance, OKX, Bybit, Bitget, Gate, HTX, and Bitmart. The mining sector was no exception, with projects like Bitmain, Canaan, and Spark Pool holding significant positions in the industry. Their commonality is that they were all established in 2017–2018 or even earlier.
Although figures like Changpeng Zhao, Xu Mingxing, Jihan Wu, and Justin Sun continue to actively engage in the industry, a general consensus has gradually formed since the DeFi Summer boom in 2020: the visibility and influence of the new generation of Chinese entrepreneurs in the global crypto industry have declined, and no leaders comparable to the previous generation have emerged so far. Given this gap, what has happened to the ecosystem of Chinese entrepreneurs, and where do future opportunities lie?
Regulatory and Geopolitical Reshaping: The First Impact of Ecosystem Disruption
The most significant factor over the past five years has been the drastic changes in regulatory and geopolitical environments.
Starting in 2021, China significantly increased its regulatory efforts against cryptocurrency-related activities, swiftly shutting down previously gray-area scenarios such as trading and mining. In recent market trends, almost any popular concept has been met with regulatory scrutiny, from earlier ICOs, NFTs, and digital collectibles to recent payment and real-world asset projects. This undoubtedly limits the inflow and support of high-quality resources into the Chinese crypto ecosystem.
These crackdowns not only accelerated the relocation of mining and exchange businesses but, more importantly, deprived Chinese entrepreneurs of a native market with natural network effects, talent density, and capital concentration, forcing them to develop in unfamiliar overseas environments.
In the early crypto ecosystem, many explosively growing Chinese projects rapidly accumulated users through the mobilization mechanisms of Chinese internet communities: WeChat group fission, KOL networks, media matrices, offline gatherings... These channels were once among the most efficient systems for spreading crypto narratives. However, changes in regulatory policies have largely invalidated this system.
Subsequently, the industry's power center quickly shifted to Europe and the United States—driven by U.S. compliance dominance, the influx of institutional capital, and increasingly mature regulatory frameworks—shaping an industry order vastly different from that of 2017–2018. New narratives, regulatory landscapes, and capital structures naturally favor English-speaking markets and compliance-oriented entrepreneurial teams. For example, prediction markets, which have certain gambling-like properties, are unlikely to emerge in the Chinese-speaking market, where gambling is strictly regulated.
In such an industry environment, the new generation of Chinese entrepreneurs also finds it harder to gain "default trust" from global media, regulators, capital, and users, requiring more trial and error in marketing, compliance, and other areas compared to similar European and American projects.
Shift in Capital Preferences: The Second Impact of Ecosystem Disruption
If the institutional barriers created by regulatory and geopolitical environments are the first impact, the "structural shift in preferences" from the capital market side has further exacerbated the marginalization of Chinese entrepreneurs in the new cycle.
In today's industry environment, without strong VC funding and resource support, projects are at a disadvantage in user acquisition, token listings, and narrative building. Chinese entrepreneurs are already at a disadvantage in terms of funding.
Due to the poor performance of altcoins and a significant decline in investment returns, Chinese-background VCs have largely reduced their investment frequency or even halted investments entirely over the past 2–3 years. Chinese entrepreneurs face significant constraints in both financing and exit paths. When dealing with VCs dominated by European and American players, Chinese projects struggle to gain an advantage due to language and cultural differences. As a result, the amount and number of financings secured by Chinese projects have been declining in recent years.
Proportion of Mainland China Projects in Industry Quantity and Financing Amount Source: RootData
This year, the crypto industry has seen a wave of IPOs and mergers and acquisitions, with companies like Circle and Gemini successfully listing on U.S. stock exchanges, and Coinbase and Ripple frequently making acquisitions. This has significantly boosted confidence among entrepreneurs and VCs, but these developments have largely bypassed Chinese projects. It can be said that European and American projects are enjoying the institutional dividends of the crypto industry's mainstreaming.
From the perspective of mainstream capital, European and American projects have inherent advantages in compliance, cultural alignment, and exit strategies. Chinese projects, unless they possess exceptional team composition and technical backgrounds, find it difficult to win the favor of European and American capital.
Mismatch Between Capability Structure and Industry Maturity: The Third Impact of Ecosystem Disruption
Over the past decade, the main theme of the crypto industry has been infrastructure and tool sectors. Although new concepts such as DeFi, NFTs, gaming, and inscriptions have emerged, most have failed to become mainstream projects.
In a previous interview with ChainCatcher, Jason Kam, founder of Folius Ventures, stated that over the past 5 to 10 years, Web3 development has been about laying the foundation, focusing more on product categories and states. This has been a decade biased toward ecosystems, infrastructure, tools, and consensus-building—in other words, a decade of B2B products.
Europe and the U.S. have three generations of highly skilled engineers who excel at building such B2B ecosystems. In contrast, the Asia-Pacific region primarily has young engineers from the post-80s and post-90s generations, whose career paths developed alongside the rise of China's B2C industry starting in 2005. In other words, their engineering experience lies in B2C and applications, which is misaligned with the development trajectory of blockchain. Thus, they may struggle with public chains and infrastructure.
"If Asia-Pacific entrepreneurs compete with their European and American counterparts in the To C space, I believe Asia-Pacific entrepreneurs are at no disadvantage. In fact, they may have advantages due to their rich product experience and aggressive market share capture strategies."
Although Chinese entrepreneurs have proven this in the more Web2-oriented exchange sector, and the brief success of Stepn demonstrated their talent in C-end products, the overall market explosion for consumer-grade products has yet to arrive. This is closely related to the maturity of industry infrastructure, and the market has not yet reached the "comfort zone" of Chinese entrepreneurs.
Entrepreneurs with Multicultural Backgrounds Are Becoming Industry Leaders
Strictly speaking, there have been notable new cases of Chinese entrepreneurs in recent years. For example, Jeff Yan, founder of Hyperliquid, is of Chinese descent. His parents immigrated from China, and he was born and raised in Palo Alto, California. He later attended Harvard University, majoring in mathematics and computer science. After graduation, Jeff joined the high-frequency trading giant Hudson River Trading as a quantitative trader. In 2022, Jeff founded Hyperliquid and, with a "small but refined," VC-free, user-driven growth philosophy, built it into one of the fastest-growing giants in the crypto industry in recent years.
However, although Hyperliquid is one of the most successful projects in this cycle with "Chinese bloodline" involvement, it is difficult to view it as a continuation of Chinese entrepreneurial influence. Jeff is active almost exclusively in the Western ecosystem, projecting values aligned with European and American ideals and never expressing himself in Chinese. The rise of Jeff and Hyperliquid highlights a fact: in the new cycle, Chinese heritage can still achieve global influence, but it must integrate into the mainstream cultural system rather than rely on old Chinese entrepreneurial paths. Relying solely on one cultural system limits a company to regional success rather than global excellence.
In fact, many well-known Chinese projects that have become sector leaders in this cycle have founders with multicultural backgrounds, often having studied in Europe or the U.S. during their university years. Examples include Sean Ren, founder of Sahara; Yu Hu, founder of Kaito; and Erick Zhang, founder of BuidlPad. Their long-term experiences in the West play a crucial role in their development.
Indeed, entrepreneurs with multicultural backgrounds are more favored in the crypto industry. For instance, Ethereum founder Vitalik Buterin, Solana founder Anatoly Yakovenko, and Binance founder Changpeng Zhao all immigrated from China or Russia to North American countries during their childhood. The collision of different political systems and cultures allowed these entrepreneurs to recognize the value of blockchain in empowering individual sovereignty early on and take swift action. They prioritize cultural inclusivity in team building, resource对接, and daily operations, making it easier to gain favor from users of diverse cultural backgrounds.
The inherently borderless nature of crypto and the regulatory and interest demands of various countries will shape the development trends of the crypto industry for a long time. Against the backdrop of multiple conflicts between China and the U.S. and the mainstreaming of the crypto industry, Chinese entrepreneurs indeed face increasing challenges. However, as the crypto industry recently faces skepticism toward gambling tendencies, nihilism, and the disproval of many project concepts, the development trajectory of Chinese entrepreneurs may no longer be a critical industry issue. What truly deserves attention is: as speculative growth and narrative bubbles gradually recede, who can continue to invest in the long-term value of decentralized technology and redefine the industry's path through real products and verifiable innovation.
The core competitiveness of the future industry landscape will depend more on whether founding teams possess cross-cultural collaboration capabilities, long-term technological investment, and organizational resilience in the face of regulatory uncertainty. Regardless of cultural or national background, those who can persistently excel in these dimensions will likely become the true beneficiaries of the next cycle. In other words, the path to success in the crypto industry has never been about "where they come from" but rather "what they can achieve."
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