The Vietnamese crypto bubble is bursting, with a sharp drop in prices and a drying up of funding hitting local startups hard, causing bankruptcies, layoffs, and the freezing of numerous Web3 projects. This reversal marks the end of a phase of speculative euphoria and opens a moment of truth for the country’s blockchain ecosystem, which was once one of the most dynamic in the world.

A Crypto Champion Country

In just a few years, Vietnam has risen to become one of the world’s leading countries in digital asset adoption, with tens of millions of wallets created on international platforms like Binance and Bybit. According to market analyses, the country had around 17 to 21 million crypto investors, placing Hanoi on par with major markets like India and the United States in terms of relative usage.

This surge in activity can be explained by a young, highly connected population (nearly 80% internet access) and a strong appetite for new forms of investment, in a context of low returns on traditional investments. Early Vietnamese successes in Web3 – such as gaming and DeFi projects – fueled the idea of a digital El Dorado where it was possible to multiply one’s investment tenfold in just a few months.

From Euphoria to the Burst of the Bubble

The bubble was fueled by the soaring price of Bitcoin, which peaked at over $126,000 in October before losing nearly half its value, dragging most other cryptocurrencies down with it. This sharp correction acted as a wake-up call: fragile projects, shaky business models, and dependence on speculative financing—everything that was barely afloat collapsed in a matter of months.

Vietnamese startups positioned in DeFi, NFTs, or crypto lending have been particularly hard hit, as they relied on promises of high returns, sometimes up to 400 or 500%, impossible to maintain in a bear market. Individual investors, many of whom took on debt or used their savings to “not miss the boat,” are now facing massive losses, with approximately 55% of them having recorded losses last year.

Startups under pressure: bankruptcies, layoffs, and pivots

On the ground, the end of the boom has resulted in widespread consolidation and job losses. Many startups have simply closed their doors, unable to secure their cash flow after the evaporation of trading volumes and the flight of investors.

Even the most established players are having to adapt urgently: the founder of the startup Ninety Eight explains that he has reduced his workforce by about a third compared to last year, while also announcing further restructuring to come. Other teams are choosing to go into survival mode, cutting their operating costs to a minimum, freezing recruitment, and postponing the launch of new features.

Funding at a Standstill

The global market downturn has had a domino effect on funding for Vietnamese crypto projects. While fundraising rounds were frequent in 2021–2023, often based on the simple promise of an upcoming token, investors now demand proof of real adoption, revenue, and sound governance.

Several founders report the increasing difficulty in convincing funds, particularly foreign ones, which are now much more cautious after being attracted by promises of triple-figure returns. Funding rounds are shrinking, fragmenting, and sometimes being abandoned altogether, stalling many projects still in the MVP or beta stage.

A Changing Regulatory Framework

Paradoxically, this crisis is occurring just as the Vietnamese government is beginning to emerge from the regulatory gray area in which crypto has been operating. For a long time, the government simply reiterated that cryptocurrencies were not legal tender, while simultaneously allowing both innovative projects and massive scams to flourish, such as certain Ponzi schemes that have siphoned off hundreds of millions of dollars.

Since 2025, the situation has changed with the enactment of the Digital Technology Industry Act, which recognizes digital assets as a form of property, establishes a licensing system for exchange platforms, and provides tax incentives for blockchain startups. In parallel, a five-year pilot program is designed to test a limited number of authorized platforms, primarily backed by banks or financial institutions with very high minimum capital requirements, which effectively excludes most young startups.

Victims, but also survivors

In this large-scale “crash test,” not all startups are doomed. Projects offering genuine utility—cross-border payment solutions, decentralized finance applications addressing local needs, tokenization of real assets—still have a role to play, especially if they can demonstrate recurring revenue and a loyal user base.

Several players in the ecosystem even believe that this purge was inevitable and, ultimately, beneficial: it eliminates opportunistic and speculative projects, forces founders to professionalize management, and pushes the industry toward the standards of traditional finance. From this perspective, the Digital Industry Law, despite its constraints, could serve as a foundation for a new generation of better-capitalized and more transparent Vietnamese Web3 champions.

What individual investors are experiencing

For individuals, the bursting of the bubble has a bitter taste. Millions of Vietnamese had invested in crypto as a shortcut to prosperity, often without a real risk management strategy, following the advice of influencers or groups on social media.

The price collapse triggered a psychological shock: significant losses, family tensions, and a feeling of having been deceived by unrealistic promises. On forums and in crypto cafes in Ho Chi Minh City and Hanoi, the tone shifted from triumphalism to a search for scapegoats—platforms, founders, the government—accused of failing to adequately protect small investors.

Points for reflection for founders and investors

For the Vietnamese founders still standing, the priority is twofold: to weather the storm and prepare for the next cycle. This requires a drastic reduction in the burn rate, increased transparency with communities, and a diversification of revenue streams beyond just trading or transaction fees.

For investors, both local and foreign, this crisis could become an opportunity to reposition themselves in more mature projects, with valuations that have returned to reasonable levels and a clearer legal framework. In a country that remains one of the most promising in the world for Web3, the bursting of the bubble may not be the end of the story, but the beginning of a new episode, less flamboyant, more demanding – and potentially more sustainable.