Article reproduced from: Foresight News
Interview & Article: Anderson Sima, Executive Editor of Foresight News
Interviewee: Jason Huang (@Jhy256), Founder of NextGen Digital Venture
British science fiction writer Douglas Adams once commented on technological progress: 'Any technology that is invented while I am between the ages of 15 and 35 is a revolutionary product that will change the world. Any technology that is invented after I turn 35 is a violation of natural laws and will be punished by heaven.' Jason is 36 this year and believes he has found that revolutionary product.
During the Christmas holiday of 2023, Jason spent time with his family in Osaka. On the way back, he made a prediction about the crypto market at the airport (at that time, the price of Bitcoin was about $43,000), stating that Bitcoin's price is expected to break $50,000 by May 2024 and reach $100,000 by the end of the year.
Reality is often more exciting than predictions. December 2024 has not yet arrived, and Bitcoin has already broken $99,000. Jason's prophecy is only half a step away from realization. According to his estimates, the LPs of the first phase fund he founded, NextGen Digital Venture, will gain over 300% returns.
The NDV Phase I fund focuses on cryptocurrency stocks and was established in collaboration with cryptocurrency wealth management company Metalpha (NASDAQ: MATH). At the time of establishment, the U.S. spot ETF had not been approved, and traditional financial money had not yet paid attention to digital assets. NDV captured the rise of digital assets during the entire ETF approval process.
Jason Huang has extensive experience in the investment industry, having worked at Huaxing Capital, Qiming Venture Partners, and other institutions. In 2022, at the age of 34, he chose to leave the family office Blue Pool Capital, which was co-founded by Jack Ma and Cai Chongxin. Amidst the confusion of some, he plunged into the cryptocurrency field and founded NextGen Digital Venture. That same year, the Golden State Warriors, led by Stephen Curry, who is the same age as him, won the NBA Championship for that season. This is his favorite team and player. 'Curry's championship in 2022 gave me immense courage to start my own business,' Jason Huang said.
In early 2023, shortly after the establishment of NDV, I interviewed Jason about the dynamics of the cryptocurrency market at that time, and some of the content resonates with today. A year later, I once again invited Jason Huang, the founder of NDV, to discuss the changes in the cryptocurrency industry over the past year and future investment trends. Below is the edited interview content.
Returns over 3 times in 20 months
Foresight News: When I interviewed you last year, the first phase of the NDV fund had just launched. At that time, Bitcoin spot ETFs had not yet been launched, but you were very firm on holding Grayscale's trust products. Can you briefly introduce the situation of NDV over the past year?
Jason: One of the most important things in our first year was that we placed most of the fund's positions in GBTC, which was at a discount to Bitcoin at the time. It gradually recovered, and after the ETF was approved, the discount was completely restored. At the end of last year, we realized that after the approval of the ETF, it would become a pure Bitcoin index, so we switched strategies and focused on stocks related to cryptocurrency, such as Coinbase and MicroStrategy this year.
Overall, we have believed from the beginning that the best investment approach is to invest in securities or stocks related to cryptocurrency. This is because the first step for traditional finance to enter digital assets is not likely to be a direct purchase of coins. Stocks offer a way that institutional investors are more familiar with. Our positioning is to help traditional finance invest in cryptocurrency-related fields and generate returns. We entered the market on March 29 last year at $29,000, and now the overall fund has made more than 3 times profit, outperforming Bitcoin significantly.
Foresight News: Reflecting on the decision made at that time, coming from the traditional VC investment field, there must have been many differing voices?
Jason: Indeed, many people do not understand, and even now some friends ask me about the reasons behind my decision at that time. But I believe finance is nothing more than innovation at both ends of capital and assets, and you must grasp one end. Years ago, Sequoia China and Hillhouse also rose with the waves of China's internet and healthcare industries. If cryptocurrency develops, we will have the same level of opportunity; it just takes time. Our fund is not even two years old; everything is just beginning.
Foresight News: So what is NDV's positioning in the market?
Jason: As I mentioned earlier, finance is essentially about innovating at both the capital and asset ends. NDV's positioning is essentially doing two things:
1) Bring traditional financial money into Crypto
2) Bring excellent assets into Crypto
We have accomplished the first task through stock funds, and as the U.S. regulatory environment changes, we can also focus on the second task. Changes in the leadership of the U.S. SEC may bring a new opportunity for Crypto. When tokens can pay dividends and can be issued compliantly at lower costs, this may bring new changes to the world of coins. I am seriously researching which assets might bring about these new changes. This will be a major theme in the coming years.
The future of Bitcoin: A national reserve asset?
Foresight News: What changes might the cryptocurrency market see after Trump takes office?
Jason: I think the most important thing is that the SEC Chair may change, and the probability of Gary resigning is very high (Note: Shortly after the interview, Gary announced his resignation). This may lead to changes in Bitcoin market regulatory policies. As for market feedback, if the Democrats were to be elected, the rise would likely be more moderate. Now, with the Trump administration's policies being friendlier, the market is racing ahead, making it harder to predict.
In this election, the Republican Party gained majority support in both the House and Senate, as well as the Supreme Court. In American history, only two presidents have had such treatment—Lincoln and Franklin D. Roosevelt. Now the third is Trump, and many people around Trump hold significant amounts of Bitcoin, including Vice President JD Vance and Musk, as well as Peter Thiel behind Vance.
If the U.S. Congress begins discussing using the federal reserve budget to purchase Bitcoin, even just discussing it could significantly raise Bitcoin's price, and at that time, it is possible that the price of one Bitcoin could reach $200,000 - $300,000, but it is uncertain whether this will be a priority for the Trump administration.
Foresight News: Bitcoin seems to be trending from digital gold to a national strategic reserve asset. What are your thoughts on this?
Jason: I cannot discuss specific institutions, but there are indeed some sovereign funds in discussion. After speaking with some sovereign funds from medium-sized countries, they are currently not at the point of considering Bitcoin as a strategic reserve. I even think that the U.S. actions may be faster. Some sovereign funds are being cautious due to previous investment failures in exchanges or related companies, and they are currently waiting to see what the U.S. does.
However, once the market changes, this trend may be faster than we imagine. I initially thought this could be a story waiting six years, but it might be completed in just two years.
Foresight News: Will the funds from these traditional fields directly invest in Bitcoin itself?
Jason: I rarely invest directly in Bitcoin itself. Many members of the investment committees of the university funds and pension funds I interact with are mostly 60 to 70 years old. For them, Bitcoin is a very difficult new concept to grasp, but if you lobby it as a new technology sector, the acceptance will be much better. At that point, they may be willing to invest in related companies rather than Bitcoin itself. However, the approval of ETFs will allow institutional investors to allocate more compliantly to BTC, which is why this bull market is a 'Bitcoin bull'.
Is Ethereum Alibaba, and Solana Pinduoduo?
Foresight News: It seems that your strategy does not involve much in Ethereum ETFs. In the last cycle, Ethereum's rise far exceeded that of Bitcoin, but there is now a lot of dissatisfaction with Ethereum. What considerations do you have behind not engaging with Ethereum?
Jason: When introducing the cryptocurrency world to traditional funds, I found that they already struggle to understand Bitcoin, and it is even harder for them to understand Ethereum. Moreover, my investment logic tends to favor investing in things that change, such as X factors that can alter the market ranking order, like Pinduoduo, which emerged later and disrupted the e-commerce landscape. I believe that Ethereum currently lacks substantial innovation or large-scale applications, which is evident from market heat and capital flow. In contrast, Solana has a bit of that Pinduoduo flavor, although I do not hold Solana, I appreciate stories with changes.
Foresight News: What is your current personal asset allocation structure?
Jason: When I founded NDV, I invested almost all my liquid assets into cryptocurrency, except for my house or assets in the primary market. I put most of my personal liquid funds into my own fund; I think this is the best explanation to LPs. Currently, the ratio of Bitcoin and other cryptocurrencies in my assets is about 5:1 to 4:1.
The non-Bitcoin projects are all run by founders I know and who are very capable, or projects recommended by friends. For example, I wrote on X in early October that I bought a meme recommended by my partner Christian, which has increased about 20 times from the bottom to now. The core here is trust transfer; I believe in what reliable people are doing, or I trust the endorsements from people I trust. However, I treat these purchases as venture capital and am willing to take the risk of loss.
Foresight News: What are your plans for the next year?
Jason: I promised the investors of the first phase fund that I would liquidate the fund at the peak of the cryptocurrency four-year cycle. I personally judge that the peak should occur within the next 12 months, depending on the larger macro environment and policy changes. After that, I will seriously explore the earlier mentioned idea of bringing Web2 into Web3.
