Wintermute Ventures: Fundamentals Return, Cognitive Reset After Attending Hong Kong Consensus

Original Title: The return of fundamentals?

Original Author: Wintermute Ventures

Original Compilation: Deep Tide TechFlow

Abstract: The Wintermute Ventures team wrote this observational report after attending the Hong Kong Consensus, providing a market sentiment scan from the perspective of a market maker.

The cooling of the market is a consensus, but the value of this article lies in explaining why—failed narratives, token identity crises, and capital rotation towards AI stocks. These signals combined point not to a short-term bear market, but to a recalibration of industry paradigms.

After returning from the Hong Kong Consensus, the Wintermute Ventures team noted that the most consistent signal from the conference was: market sentiment is becoming cautious, and almost no one is willing to pretend they know where the next obvious wave is. The good news is that conversations have become more specific, making it easier to distinguish between real signals and cyclical narratives.

What We Heard

Downward sentiment, clear catalysts hard to find

Most people do not see any obvious recent catalysts that could reverse sentiment, and many investors find it difficult to articulate where the next major wave in crypto is—aside from a few obvious areas. Founders are feeling this shift. Several founders expressed a desire to have raised funds earlier, as the bar is now higher, and investors need to see more traction before committing.

Clear signs of capital rotation towards AI stocks, especially in Asia

Many "liquid funds" are actually family offices and proprietary capital, rather than strictly fund-authorized capital. This type of capital has placed momentum bets on AI, using publicly traded AI stocks as the default new trading targets. However, this seems more like momentum behavior rather than a fundamental change in crypto investment logic.

Tokens are in an identity crisis outside of mainstream assets

Outside of major assets, almost no one is excited about altcoins. The deeper issue is that tokens have lost their clear identity as a trusted value accumulation and incentive alignment mechanism. Token issuance is increasingly seen as a distraction, as the mercenary-like voices of farmers are noisy and fleeting, making it difficult for issuances to convey lasting value or alignment signals. A common direction discussed among founders is to stop replicating old scripts and instead design for real users and long-term alignment.

Opportunities focus on fundamentals and defensiveness

The market clearly favors businesses with revenue, licenses, and distribution moats. There is still a belief that crypto startups can deliver better 10x returns than traditional tech, as traditional tech has become slower and more consensus-driven. Meanwhile, standing out in some crowded tracks is becoming increasingly difficult: yield packaging products are widely considered saturated and hard to differentiate, prediction markets still have new entrants but lack new differentiation, and the options market remains interesting, though many believe the infrastructure and edge dynamics are not yet ready.

Latin America repeatedly mentioned as an attractive region

Latin America has shown clear product-market fit and is moving towards stricter regulation. The winners will be teams that can navigate regulatory rules country by country and replace traditional banking tracks. This track is already crowded, and differentiation is no longer simply from a stablecoin perspective, but rather a comprehensive reflection of regulatory capability, connectivity, and execution.

Despite the weakening sentiment, people have not given up on crypto. Expectations have simply risen. Investors now demand real evidence (which naturally leads to self-correction). Founders are under pressure to focus on distribution and acquiring real users. Tokens face stricter scrutiny on value capture and incentive alignment. From the perspective of Wintermute Ventures, we remain optimistic. These resets, although challenging, are healthy—this is precisely when the most resilient companies led by teams with genuine long-term beliefs are forged.