Despite US and Wall Street's recent headlines dominating crypto narratives, Asia's crypto ecosystem harbors extraordinary potential that many may overlook. As an Asia originated crypto VC, I see compelling opportunities emerging in Asia from a unique combination of talent, infrastructure, and market dynamics.
The Current Landscape
The recent institutional embrace of crypto in the West - from Wall Street's spot Bitcoin ETFs to the surge in U.S. venture funding - has temporarily overshadowed Asia's role in the ecosystem. The U.S. continued to dominate the crypto venture landscape, with the most capital investment (56%) and deals (44%) involving U.S.-headquartered recipients. (source: https://www.galaxy.com/insights/research/crypto-blockchain-venture-capital-q3-2024/)
This has also led Asian LPs to increasingly allocate capital to Western VCs, who allocate a disproportionately large amount of VC funding to US based projects. Top Asia founders find it challenging to obtain funding of similar size to compete on a global scale. We’ve also observed that top Asia teams are forced to raise at comparatively lower valuations to their western peers.
Yet beneath this surface-level trend lies a foundation of strength that makes Asia's crypto ecosystem particularly compelling for long-term investors.
Here's why:
Asia has quietly surpassed other regions in crypto developer share. While the U.S. and European developer bases have plateaued, partly due to the AI boom drawing talent, Asia's continues to grow. More importantly, we're seeing more high calibre founders - these aren't just developers, but founders who combine technical expertise with entrepreneurial drive.
The region has already produced many flagship projects demonstrating its world-class innovation capacity. The founders behind these successes share distinct characteristics:
A powerful network effect is emerging. Today's successful projects are becoming launchpads for tomorrow's innovations. The Zilliqa mafia bred the likes of Altlayer, Automata, Based app etc. The Kyber Network ecosystem, for instance, has spawned successful ventures like Jupiter and Pendle, creating a self-reinforcing cycle of innovation.The success of Ronin and YGG during last cycle opened up the floodgate of Web 3 gaming projects while the recent explosion of Virtuals protocol will undoubtedly push AI agent innovation forward and attract top developers into the ecosystem.
Years of infrastructure development are now bearing fruit. Take Hyperliquid - an L1 appchain that delivers CEX-comparable performance in a decentralized framework. As crypto evolves from infrastructure to application focus, Asian teams hold natural advantages in:
Last but not least, Asia dominates global crypto liquidity provision. This liquidity dominance creates a powerful foundation for new projects and innovations, supported by deep expertise in trading infrastructure, market making, and risk management.
Looking Ahead
While institutional attention focuses on Western developments, Asia's crypto ecosystem is quietly strengthening its fundamentals. The combination of growing developer talent, proven success cases, mature infrastructure, and liquidity leadership creates unique opportunities.
The next wave of crypto innovation will likely emerge from teams that can combine technical excellence with rapid market execution - precisely the strengths that Asia's ecosystem has been cultivating. For investors willing to look deeper, these dynamics present compelling opportunities that may be overlooked by those focused solely on Western markets.
While most of the crypto VCs are looking away from this region, we at LongHash Ventures remain convinced of the opportunity set and are dedicated as ever to continue to deploy capital into category leading Asia crypto teams who can ride the next expansion wave of crypto growth.