Folius Ventures Founder: Crypto VCs Will Disappear! Don't Look for 100x New Stories in the Next Round, Just Buy the Winners

Author: 168X (Host Mr. Z) × Jason Kam (Founder of Folius Ventures)

Crypto Hasn't Disappeared, But It Has Transitioned from the Wild West to the Fintech Era: The Real Big Opportunities Are Converging on "Everything on the Chain" and "Dollars Entering Everything"

On October 21, 2026, 168X invited Jason Kam, the Founder of Folius Ventures, for a conversation spanning Crypto VC, Bitcoin, AI, semiconductors, and Chinese tech stocks.

Jason's transformation itself is one of the most noteworthy signals in this market cycle. Folius has basically stopped new primary investments in Crypto since September 2024, and Jason himself has shifted about 80%-90% of his focus to AI and the secondary market since January and February of this year. Meanwhile, he is more willing than ever to gradually buy into Crypto during downturns, especially BTC.

The reason is not that "Crypto has a new narrative"; on the contrary, Jason believes that the stories that could be told in the past few cycles have mostly been exhausted, and the truly promising tracks are rapidly converging. Future winners may no longer come from "finding the next unheard-of new coin," but rather from finding the true long-term winners in already validated massive markets.

1. Folius Hasn't Invested in Primary Crypto for Two Years: This Round Has Shifted from "Sowing" to Harvesting

Mr. Z: Folius was established in a completely different Crypto environment in the last cycle. As we stand today, where has your investment framework changed the most?

Jason: Folius can now actually be divided into two entities. One is the past fund, and the other is more like my own holding company, a small family office, which also has some external funds and can invest in stocks, Crypto, and anything else.

Jason: Since January and February of this year, I have put about 80%-90% of my energy into AI, especially the secondary market. In Crypto, I am more focused on managing existing positions.

Jason: Moreover, we have basically stopped making primary Crypto investments since September 2024. One reason is that the lifecycle of the previous Token Factory model has come to an end. A few people forming a project, raising funds, TGE, low circulation, high FDV, and then waiting for unlocks—this model is increasingly making less sense.

Jason: Another reason is that our fund structure allows LPs to redeem quarterly. This structure is inherently unsuitable for early-stage projects that take 5 to 8 years to exit.

Jason: So now it feels more like a Harvesting Phase. The focus is on how to realize and manage liquidity for what has already been invested, rather than trying to prove that we are still VCs by forcibly seeking out a bunch of new private deals.

2. There Will Be No Crypto VCs by 2030: Only Fintech VCs, Liquid Funds, and Multi-sector Funds Will Remain

Mr. Z: Looking ahead to 2030, do you think the category of "Crypto VC" will still exist?

Jason: I believe there will definitely be no Crypto VCs in the future.

Jason: Liquid Funds and Prop Funds will certainly still exist because Crypto has its own market structure, on-chain data, chip analysis, and historical experience, which can provide an edge. But if you are talking about traditional VCs that specifically focus on primary Crypto, I think it will become increasingly difficult.

Jason: The reason is simple. After Crypto becomes formalized, your real competitors will become institutions like Sequoia, Founders Fund, and USV. Why would good founders want to take money from a boutique Crypto fund?

Jason: In the future, Crypto funds will either join Liquid or OTC, becoming more like public market investors; or they will transform into Fintech VCs, investing in stablecoins, payments, and neobanks; or they will completely open their mandates to invest in AI, robotics, and biotech.

Jason: Institutions like Paradigm and Framework are already moving in this direction. If an investor only had the ability of "I understand Crypto" in the past, that will no longer be enough in the future.

3. Crypto Will Ultimately Only Have Two Super Themes: Everything on the Chain and Dollars Entering Everything

Mr. Z: If the stories of past infrastructures, Layer 2s, and new public chains are gradually losing their effectiveness, what is left in Crypto?

Jason: I think it has already been very well defined; it essentially boils down to two things.

Jason: The first is Everything on the Chain, and all financial products gaining more equitable and accessible trading markets. Ultimately, this corresponds to Everything Exchange, trading, speculation, and various assets entering the on-chain market.

Jason: The second is the dollar as a value carrier, entering every corner of life around the world. What emerges from this will ultimately be stablecoins, payments, payment processors, and neobanks.

Jason: In the past, everyone talked about sharding, ZK, and various application layers, but most of them ultimately failed. A core reason is that users simply do not care about the technology itself. Many technologies are just hammering nails with a hammer.

Jason: But trading and money are not like that. The world of financial assets is a huge TAM, and global payments are also a massive market. Crypto's penetration in these two markets is still very low.

Jason: So it's not that Crypto has no opportunities; rather, the opportunities have converged from 100 vague tracks into 2 very large tracks.

4. Stop Looking for the Next 100x: The Real Alpha Is to Buy Winners Directly When Undervalued

Mr. Z: As an investor, since the tracks are so clear now, how should one allocate?

Jason: My thinking is becoming increasingly simple: Buy the Winners.

Jason: In the directions of stablecoins, exchanges, and payments, who is leading is becoming increasingly clear. You can study new startups, but why assume that a newly formed team will do better than those leaders who already have distribution, liquidity, engineering capabilities, and users?

Jason: What is truly worth doing is to look at the market cap of the winners relative to their adoption and see if it is expensive or not.

Jason: For example, for Robinhood, you can look at the market cap relative to assets under custody; for Hyperliquid, you can look at the valuation relative to TVL and volume; similar payments companies should look at their actual transaction volume and user penetration.

Jason: The market capitalization of these companies will fluctuate cyclically around adoption. During bubbles, they can be ridiculously expensive, and during troughs, the market may think they will never grow again.

Jason: The real alpha may not be discovering winners, but having the courage to buy when the market temporarily dislikes the winners.

5. Entrepreneurs Shouldn't Directly Compete with the First Place: The Biggest Lesson from HIP-3 Is That Capital Has Inertia

Mr. Z: If investors should directly buy winners, is there still an opportunity for entrepreneurs?

Jason: Yes, but don't create something that is exactly the same as the first place.

Mr. Z: For example, with HIP-3, I initially thought this design was very clever, allowing different teams to establish their own markets on Hyperliquid. But in the end, you see TradeXYZ capturing the majority of the trading volume, and this is not just about whether the mechanism is good, but also about founder relationships, early ecosystem positioning, and liquidity.

Mr. Z: Capital itself has inertia and stickiness. Once a positive cycle is formed, it is difficult for later entrants to win just by saying, "I can do the same product."

Jason: Therefore, entrepreneurs must find a completely different edge. For example, if others are doing traditional trading, can you do AI + intent trading? If others are doing pure trading, can you turn social into a new trading interface?

Jason: Finding new entry points in already validated large tracks is much more important than reinventing a new track that no one needs.

6. BTC and Crypto Have Already Split: One Is Digital Gold, the Other Is Fintech

Mr. Z: If there is to be a new bull market this round, what story should Bitcoin and other Cryptos tell?

Jason: I think we must completely separate BTC from everything else.

Jason: BTC represents Digital Gold, while other Cryptos represent Fintech.

Jason: In the past, Bitcoin was like the sun, and the entire industry revolved around it. But now, if you look at assets like Hyperliquid, their correlation with BTC is no longer as high as it used to be; instead, they are increasingly resembling movements in the US stock market and Fintech adoption.

Jason: BTC itself has also increasingly detached from the past four-year halving cycle. The new supply each year is already very small, and relative to ETFs and global dollar liquidity, the impact of halving on marginal supply and demand is becoming weaker.

Jason: BTC is increasingly resembling gold, as the dollar cycle and global asset allocation slowly rise. Other tokens, if they have real cash flow, value accrual, credible management, and growth, essentially become more like stocks that can be traded 24/7.

Jason: So don’t use the same framework to evaluate BTC and HYPE. They are already two completely different assets.

VII. What to Do with BTC in the Next 12-18 Months: Buy on Dips, But Remember These Three Major Scary Stories

Mr. Z: So are you bullish or cautious about BTC now?

Jason: Since June this year, my basic judgment has been to buy on dips in the next 12-18 months. If the market falls, buy slowly; if it rises, hold it; if it rises too much, maybe sell a little call.

Jason: After experiencing several cycles, everyone knows what a cycle bottom looks like. Long-term holders at this position have no particularly strong reason to sell, unless forced.

Jason: The three scary stories that could lead to a significant drop in BTC, in my opinion, are:

Jason: The first is extremely strong AI productivity. If AI truly allows productivity to grow almost infinitely, why would I hold an asset that doesn’t generate cash flow? Capital might all chase productivity assets.

Jason: The second is Q Day. If quantum computing suddenly makes breakthroughs, it could create huge FUD regarding the security of existing cryptography. In the end, there may be technical solutions or forks, but the market will definitely trade on panic first.

Jason: The third is a real financial crisis and forced liquidation. If the AI cycle collapses and triggers a liquidity crisis, BTC will definitely drop along with risk assets.

Jason: But aside from these three stories, my thinking remains the same: buy slowly on dips.

VIII. The Next Major Source of Liquidity for Crypto May Be AI: Employee Cash-Outs Could Bring in $10-60 Billion

Mr. Z: Why do you say that the future Crypto Cycle will increasingly be determined by the AI Cycle?

Jason: Because the wealth effect generated by AI is simply too large.

Jason: You can make a rough calculation by adding up the potential IPOs and cash-outs of all AI companies in Silicon Valley over the next 2-3 years, and then assume these employees eventually allocate 2%-15% of their assets into crypto.

Jason: I estimate that this potential inflow could be $10-60 billion.

Jason: This figure can even be compared with the cumulative net inflow brought by BTC ETFs since their launch.

Jason: Moreover, this is just from employee cash-outs, not accounting for the wealth effect created by the rise in AI stocks for the entire market.

Jason: So just because AI is particularly good doesn’t mean crypto is immediately the best, as funds are currently chasing AI; but once AI wealth starts to realize, part of that money will eventually flow into crypto.

Jason: The reverse is also true. If AI suddenly collapses, risk assets cannot be immune in the first phase.

Jason: The next major macro variable for crypto may not even be within crypto itself.

IX. The Toughest Turning Point for AI Hardware: What to Watch Is Not Token Price, But Revenue per GPU

Mr. Z: You’ve spent a lot of time researching AI and semiconductors. What do you think is the hardest part to judge in the AI cycle?

Jason: Earlier this year, it was relatively simple. At that time, the market didn’t understand coding agents, so you could buy a basket. Later, the market didn’t understand GPU demand, which was also easier to navigate. But now the questions that need to be answered have become very difficult.

Jason: The core issue is not whether "token prices have fallen," but whether revenue per GPU has actually decreased.

Jason: It’s true that token prices have been falling, but the cost of generating tokens per GPU is also rapidly decreasing. Model efficiency, software optimization, and chip utilization are all improving.

Jason: Therefore, a drop in token price does not necessarily equate to a deterioration in GPU economics.

Jason: Another variable is the increase in demand from open source and post-training, versus the decrease in demand from slowing frontier lab growth; which one is greater?

Jason: The real danger is that by the time you clearly see GPU rental yields dropping, smart money may have already traded 1-2 quarters ahead.

Jason: So the peak of AI won’t be as simple as looking at a moving average. The real turning point is hidden in revenue per GPU, channel checks, and hyperscaler earnings.

X. The Next Move in AI May Shift from Chips to Hyperscalers: The Odds for MSFT, AMZN, and GOOG Are Clearer

Mr. Z: If semiconductors are becoming increasingly difficult to manage, what AI stocks would you dare to buy now?

Jason: I’m currently more inclined to buy hyperscalers.

Mr. Z: Because the capabilities of open source models are becoming stronger, companies don’t need to use the most expensive frontier models for all tasks. CSPs can integrate various open source models into their clouds and then provide enterprise deployment.

Jason: Thus, the real opportunities lie with cloud distributors like Microsoft, Amazon, and Google.

Jason: So if I had to buy AI now, I might look at MSFT, AMZN, GOOG, or even some cloud ETFs. Semiconductors are harder to buy because market expectations are already very high, and I can’t be sure where revenue per GPU will ultimately go.

Jason: This trade isn’t something you can just hold for 10 years without looking. The speed of open source advancements, closed source frontier leads, token prices, and GPU economics are all still changing.

Jason: But at least at this stage, the logic of rotating from hardware to CSP is clearer than continuing to mindlessly buy all chips.

XI. China AI Only Wants to Bet on Three Companies: DeepSeek, Tencent, ByteDance

Mr. Z: Looking ahead to the next few years in China AI, who do you want to bet on the most?

Jason: I currently want to bet on three companies: DeepSeek, Tencent, and ByteDance.

Jason: What attracts me most about DeepSeek is its very clear strategy. It aims to make models as open as possible, with the lowest costs and the strongest performance, and then maximize cost/performance.

Jason: Tencent doesn’t necessarily need to produce the world’s strongest frontier model. Its real assets are WeChat, gaming, and advertising distribution. AI can significantly improve advertising efficiency and greatly reduce game development costs, while the monetization channels remain firmly in Tencent’s hands.

Jason: ByteDance represents a different approach. It has very strong consumer distribution and is one of the most aggressive companies in China in terms of computing power investment.

Jason: Therefore, China doesn’t necessarily have to completely surpass the U.S. in frontier models to create huge AI equity value.

Jason: Model is capability, distribution is the machine that turns capability into money.

XII. ByteDance’s Biggest Hidden Alpha: Not Doubao, But Video Generation + App Factory

Mr. Z: Why do you find ByteDance particularly interesting now?

Jason: The most underrated aspect of ByteDance, in my opinion, is not simply Doubao.

Jason: The first is video generation. If its video generation model continues to iterate, the gap between AI video and traditional film production will become smaller and smaller in the next year or two.

Jason: If in the past a piece of content required actors, photography, lighting, post-production, and a production team, in the future, a few people plus a bunch of compute could produce long and short films, fundamentally changing the entire entertainment cost curve.

Jason: The second and more important aspect is that ByteDance itself is an app factory.

Jason: It excels at product development, growth, and distribution, and has already proven through TikTok that it can rapidly push products to a global audience.

Jason: In the future, as AI lowers the cost of app development, companies that can continuously produce apps and push them to hundreds of millions of users will become increasingly valuable.

Jason: Therefore, ByteDance’s edge is not just that "it has a model," but rather model + data + distribution + growth engine.

XIII. Don’t Force the Narrative of AI + Crypto: Real AI Researchers Don’t Care About Crypto

Mr. Z: So where exactly is the real AI + Crypto?

Jason: To be honest, nobody knows.

Jason: The truly serious AI researchers often don't care about crypto. Instead, it's the crypto natives who are constantly thinking about how to integrate AI with tokens.

Jason: This doesn't mean there are no opportunities at all. For instance, areas like privacy, private inference, and Venice have real demand; payments, stablecoins, and financial markets might also see more machine-to-machine transactions due to the emergence of agents.

Jason: However, I won't assume that a project combining AI and crypto automatically has value.

Jason: The biggest issue with AI + crypto has always been that the narrative is too easy to tell, while finding real product-market fit is incredibly difficult.

Jason: If crypto truly enhances AI products, then it deserves to exist, rather than being forced into an AI narrative just to issue a token.

14. If the U.S. Enters a K-shaped Downturn: PDD + Agents May Become Defensive Assets

Mr. Z: Chinese internet stocks are already valued very low. If the U.S. or the global economy really enters a K-shaped economy, where is the next opportunity?

Jason: I would look at A-shares, Hong Kong stocks, and Chinese concept stocks separately, as they each have their own funding issues. However, some individual companies are indeed priced incredibly low.

Jason: Take PDD, for example; I have a position in it. I like it not just because it's cheap, but because it may have a natural advantage in a K-shaped downturn.

Jason: If consumers increasingly seek low prices, and agents help users find the lowest prices and highest efficiency products across the internet, then platforms like PDD, which have optimized their low-cost supply chains, may actually be strengthened.

Jason: You can look back at the U.S. financial crisis from 2007 to 2009; dollar stores, which offer extremely low prices, did not collapse like high-end consumption did.

Jason: So if AI ultimately leads to a divergence in employment, income, and consumption structures, low-cost distribution + agents could be a very interesting downside protection.

15. The Three Key Areas to Research in the Next 12 Months: Cheap Intelligence, AI Post-Cycle, Robotics

Mr. Z: Finally, if you could only give investors three directions worth researching in the next 12 months, what would you choose?

Jason: First, I really want to understand who will turn the declining costs of intelligence into their own profits.

Jason: As tokens become cheaper and AI capabilities resemble commodities, someone will inevitably buy this cheap intelligence and transform it into significant enterprise value. It could be a private equity firm, a software company, or a completely different business model.

Jason: Second, if AI weakens in the medium term due to a decline in revenue per GPU, what should we buy then? Everyone knows how to go long on AI, but not many have seriously considered who will emerge as the winner in the AI post-cycle.

Jason: Third, I am very convinced that AI will unlock robotics and the physical world.

Jason: The next market cycle will certainly start trading robotics more seriously. The question is not whether robotics will become a narrative, but which companies can truly turn AI intelligence into physical productivity.

Jason: So in the next 12 months, I want to research three things: who captures cheap intelligence, who wins in the AI post-cycle, and who will dominate robotics.

Mr. Z: To conclude this episode, I will summarize Jason's framework into five judgments.

• First, traditional crypto VCs are losing their necessity; the ones that will remain will be fintech VCs, liquid funds, or investment platforms that can cross AI, robotics, and public markets;
• Second, the big opportunities in crypto have converged into two paths: everything going on-chain and the dollar entering everything; instead of looking for 100 new stories, it’s better to buy proven winners directly at the cycle's trough;
• Third, BTC is gradually detaching from the entire crypto fintech ecosystem, becoming an independent digital gold trade; in the next 12 to 18 months, the most important factors will not be halving, but the AI wealth effect, Q Day, and liquidity crises;
• Fourth, the biggest impact of AI on crypto may not be AI agents issuing tokens, but how much wealth AI creates and how much of that wealth flows into crypto;
• Fifth, the next stage of alpha has already begun to shift from "Will AI continue to rise?" to "Who will monetize cheap intelligence, who to buy in the AI post-cycle, and who will win in robotics?"

Thanks to Jason Kam for joining 168X!