Neither VC nor retail investors, who actually made money in this bull market?

Original author: Jademont, CEO of Waterdrip Capital

Who has made money in this bull market so far?

First of all, it’s definitely not the VCs. Most of the projects that VCs invested in haven't even started issuing tokens yet. Even those tokens with high FDV and low circulation that are criticized by the community may look like they have increased several times on paper, but if there isn't a subsequent altcoin bull market, when VCs unlock their tokens, a 90% drop wouldn’t be surprising.

Secondly, it’s not the retail investors either. Most retail investors are trading memes, playing with altcoins, and engaging in contracts. While it can't be said that no one has made money, it's a very small number, comparable to the odds of playing the lottery.

From observations, the ones making money fall into these categories:

1. Bitcoin holders. Holding Bitcoin means the whole world is working for you. Last year at this time it was $25,000, now it’s $65,000, a huge profit. It’s quite likely to reach $100,000 within a year, but most people look down on this increase and thus miss out on making money with BTC, which is reasonable.

2. Centralized exchanges. Exchanges have always been at the top of the cryptocurrency food chain, with the entire crypto space basically working for them. Of course, running an exchange also carries huge risks, being constantly on the move, dealing with overseas regulations, and facing risks from entities like the SEC. The risks are proportional to the rewards, which is reasonable.

3. CeFi platforms like Tether. Tether made $4.7 billion in the first quarter, more than most exchanges. Strictly speaking, this money isn’t earned from the crypto space. Additionally, some financial service providers in the crypto space are also quietly making a good profit, such as asset management platforms. They provide good services to the crypto space, and their earnings are quite reasonable.

4. Operating teams of some public chains/DeFi products. DeFi products like Uniswap actually have a large amount of traffic, and the transaction fees are unrelated to governance token holders, almost all going into the team's pockets, which is quite substantial. The Base team may have earned tens of millions of dollars from transaction fees generated by a single product, Friendtech. The Tron public chain also makes a lot from daily USDT transfers, most of which also goes into the team's pockets. These projects do not rely on selling tokens to retail investors but rather on developing their business to make money, similar to traditional internet businesses. They are the hope of the crypto space and worth learning from by all project teams. Especially with MakerDAO as a model, Uni also has proposals for dividends, all of which are the Alpha of this bull market.

5. High market cap token issuance projects primarily for selling tokens. If they have already launched on CEX, they have made a fortune this round. They don’t need any income; for example, some ZK projects have only a few dozen daily active users on-chain after airdrops, yet their market cap remains in the tens or hundreds of billions, with market makers happily helping the team sell tokens. Other high-controlled DeFi tokens, mostly GameFi tokens with few active users, are in a similar situation. These toxic elements in the crypto space continuously drain resources. The teams behind these toxic projects are, of course, accomplices in making money. It’s laughable that not long ago, I saw someone bragging on Twitter about how much they made from operating projects; such spectacles only happen in the crypto space.

There are also others, like quantitative teams, making a hard-earned living, but I won’t list them all. If anyone has more discoveries, feel free to reply in the comments to let me be envious.

However, based on the analysis above, one might consider building a perpetually profitable crypto portfolio, mainly holding assets from categories 1-4, while avoiding category 5.