Paradigm once again ushered in a paradigm shift, crossing the field of AI from cryptocurrency

If you want to ask who are the most powerful VCs in the cryptocurrency field, Paradigm must be on the list. The bear market is All in Bitcoin, and it became famous after incubating Uniswap in depth. Another paradigmatic scientific revolution.

Today, Paradigm is once again ushering in a paradigm shift, no longer focusing only on cryptocurrency/Web3, but beginning to expand its focus to Ai.

Sharp-eyed netizens discovered that Paradigm recently quietly modified the homepage of the website. The title of the homepage was changed from "Paradigm supports disruptive encryption/Web3 companies and protocols with as little as $1 million and as much as $100 million or more" to "Paradigm is A research-oriented technology investment firm” and removed expressions related to cryptocurrencies/Web3 such as “We believe cryptocurrencies will define the next few decades.”

Let's make a comparison.

Old official website:

Paradigm backs disruptive crypto/Web3 companies and protocols with as little as $1M and as much as $100M+.

Every once in a while, a new technology emerges that changes everything. The Internet has defined innovation over the past few decades. We believe that encryption technology will define the decades to come.

Paradigm is an investment firm focused on supporting future crypto/Web3 companies and protocols. Our approach is flexible, long-term, multi-phased and global. We are often involved in the earliest stages of formation and continue to support our portfolio companies over time.

From technology (mechanism design, smart contract security, engineering) to operations (recruitment, governance strategy), we take a deep hands-on approach to helping projects reach their full potential.

New official website:

Paradigm is a research-driven technology investment firm

We invest in, build and contribute to companies and agreements with as little as $1 million and as much as $100 million+. We are often involved at the earliest stages and continue to support our portfolio companies over time.

From technology (mechanism design, safety, engineering) to operations (recruitment, go-to-market, legal and regulatory strategy), we take a deep, hands-on approach to helping projects reach their full potential.

According to a recent article by The Block, people familiar with the matter revealed that **Paradigm is shifting its focus only on cryptocurrencies to include "cutting-edge" technologies such as artificial intelligence. People familiar with the strategy said that the company Not changing its mission and continuing to focus on cryptocurrencies and web3, the updated website copy is designed to emphasize its technical research. **

This can’t help disappointing many people. As the leader of the VC in the encryption industry, Paradigm, a guy with thick eyebrows and big eyes, has also begun to betray the revolution, and the dusty emoticons have begun to come into play.

So, what is Paradigm's active "paradigm shift"?

First of all, from the perspective of the external environment, AI is hot, and cryptocurrency is weak.

ChatGPT, a subsidiary of OpenAI, has created an AI whirlwind. Whether it is the primary market or the secondary market, they have taken off under the blessing of AI concepts. As soon as Nvidia’s financial report was released, the market value increased by 220 billion US dollars overnight, which is only one step away from the trillion-dollar market value mark. .

In contrast to the encryption market, the secondary market is still a bear market, the trading volume continues to shrink, and the regulatory pressure from the United States is also increasing.

Second, Paradigm may have its own helplessness.

In November 2021, Paradigm announced the completion of the fundraising of a new US$2.5 billion fund, holding a large amount of investable capital.

In January 2022, Citadel Securities, the largest market maker on Wall Street, announced that it had received US$1.15 billion in financing led by Sequoia Capital and cryptocurrency investment company Paradigm, with a valuation of US$22 billion.

This seemingly irrelevant investment to Web3 once caused a sensation. At that time, we commented on Twitter that, as a VC, Paradigm has an urgent task to invest money. When there are too many funds raised, there are investment options On the contrary, it will be less, and the expected return must be obtained, so in the environment of high valuation of the overall cryptocurrency at that time, investing in Citadel Securities may be a more cost-effective choice.

For any fund, the larger the fundraising scale, the greater the investment pressure. They need to shoot out all the bullets within a limited time and obtain the expected return. For an encrypted VC, in the encrypted bear market , and the future narrative is unclear, it is not easy to shoot the bullet out.

At this point, there are often two options:

**(1) Invest in the secondary market to purchase assets with better liquidity. **

For example, on May 13, Paradigm One LP, an entity under Paradigm, purchased 810,000 Coinbase shares at a total price of approximately US$50 million, and currently holds a total of 4.5 million Coinbase shares.

(2) Layout other fields and diversify investment.

Just like all kinds of A-share theme funds before, whether it is medicine or new energy, they all buy Moutai and become liquor funds.

Finally, for Paradigm, cryptocurrencies have also been traumatic.

Paradigm was once a major backer of FTX, investing $278 million. With the collapse of FTX, this investment was also wiped out, and it was accompanied by doubts.

In November 2022, Matt Huang, co-founder of Paradigm, issued an apology, ** "We are sorry for investing in a founder and company that ultimately did not conform to the values of cryptocurrency. They have caused huge damage to the encryption ecosystem." **

It is worth mentioning that after the Luna crash in July 2022, Matt Huang sent letters to LPs, explaining the causes and impact of the recent cryptocurrency market crash, and giving psychological massage.

In closing, he wrote: "Looking ahead, we continue to focus on the multi-decade opportunity in cryptocurrencies. Our team and the entrepreneurs we support find it easier to focus on the substance in a quieter environment, Without being a distraction. Speculative tourists have left and valuations are starting to rationalize. Strong companies are finding it easier to hire great talent. Overall, we are optimistic that the next 12-24 months will be a good time to build and a great time to invest in cryptocurrencies.”

Hopefully, it will be done.