I just went through the venture capital data for April and it’s truly a disaster. We’re talking about a 74% drop in funding compared to March. Only $659 million was recorded. The market's fall from $2.6 billion to this level is a major wake-up call for anyone still chasing after vapor chains.

My gains and losses are taking a heavy hit from this secondary market. Clearly, the big players are sitting tight while the whole world is watching the situation at the Strait of Hormuz. With oil tankers having to pay fees in crypto just to pass through and energy costs heavily impacting the AI sector, we find ourselves in a strange situation where macro factors are dominating the micro ones.

Liquidity traps are real. Spot trading volume on centralized exchanges (CEX) has dropped 40%, which has completely devalued overhyped infrastructure projects. Nobody wants to pay top dollar for another Layer 2 project when actual fee revenue is plummeting.

But if you look closely, there's still a glimmer of hope. DeFi and AI are still attracting funding rounds. Money is shifting from infrastructure projects to genuinely useful applications. I've noticed 12 funding rounds in DeFi and 8 in AI, showing that developers are still building even as venture investors are getting stingy.

Everyone is waiting for the draft of the CLARITY Act on May 11. Polymarket odds for the passage of this legislation this year just rose to 67% after a yield compromise between banks and Coinbase. If that happens, we might finally see the floodgates for institutional money open up in June.

Until then, get ready for a brutal consolidation phase. If your favorite project has a high burn rate and lacks real users, it could tank to zero or get picked up by Tether or Coinbase for pennies on the dollar. I'm keeping my investment capital low and closely watching the floor price. This is the ultimate stress test for the industry, and only the leanest projects will survive.
$ETH $XRP $SOL
#CryptoVCFundingFalls74%inApril