Interview & Article: Anderson Sima, Executive Editor of Foresight News
Interviewed: Jason Huang (@Jhy256), Founder of NextGen Digital Venture
Douglas Adams, a British science fiction writer, once commented on the progress of science and technology: "Any technology that comes out between the ages of 15 and 35 is a revolutionary product that will change the world. Any technology that comes out after I am 35 is against the laws of nature and will be condemned by God." Jason is 36 years old this year, and he believes he has found that revolutionary product.
Jason spent the Christmas holiday of 2023 in Osaka with his family. On the way back, he made a prediction about the crypto market at the airport (the price of Bitcoin was about $43,000 at the time), saying that the price of Bitcoin is expected to exceed $50,000 in May 2024 and reach $100,000 by the end of the year.
Reality is often more exciting than predictions. Before December of 24, Bitcoin has already exceeded $99,000. Jason's prediction is only half a step away from being realized. According to his estimates, the LPs of the first phase of NextGen Digital Venture Fund he founded will receive a return of more than 300%.
NDV Phase I Fund focuses on cryptocurrency stocks and was established in cooperation with cryptocurrency wealth management company Metalpha (NASDAQ: MATH). At the time of its establishment, the US spot ETF had not yet been approved, and traditional financial funds had not yet paid attention to digital assets. NDV captured the increase in digital assets during the entire ETF approval process.
Jason Huang has extensive experience in venture capital and has worked in institutions such as China Renaissance Capital and Qiming Venture Partners. In 2022, at the age of 34, he chose to leave Blue Pool Capital, a family office jointly established by Jack Ma and Joseph Tsai. Under the puzzled eyes of some people, he devoted himself to the field of cryptocurrency and founded NextGen Digital Venture. In the same year, the Golden State Warriors won the NBA championship of the season under the leadership of Stephen Curry, who was the same age as him. This was his favorite team and star. "Curry's victory in 2022 gave me great courage to start a business." Jason Huang said.
Shortly after founding NDV in 2023, I interviewed Jason about the cryptocurrency market dynamics at the time, and some of the content reflects 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. The following is the edited interview content.
20 months after establishment, the return rate exceeded 3 times
Foresight News: When we interviewed you last year, the first phase of NDV had just been launched. At that time, the Bitcoin spot ETF had not yet been launched, but you were very determined to hold Grayscale's trust products. Can you briefly introduce the situation of NDV in the past year?
Jason : One of the most important things we did in the first year was to put most of the fund's positions on GBTC. At that time, it was at a discount to Bitcoin, but it slowly recovered. After the ETF was approved, the discount was fully restored. At the end of last year, we realized that after the ETF was approved, it would become a pure Bitcoin index, so we switched our strategy and turned to stocks related to cryptocurrencies. For example, this year we have more positions in Coinbase, MicroStrategy, etc.
Overall, we have always believed that the best way to invest is securities or stocks related to cryptocurrency, because it is difficult for traditional finance to enter digital assets by directly buying coins. Stocks are a way of expression that institutional investors are more familiar with. Our position is to help traditional finance invest in cryptocurrency-related fields and gain returns. We entered the market at 29,000 on March 29 last year, and the overall floating profit of the fund has exceeded 3 times, which is much better than Bitcoin.
Foresight News: Looking back at the time when you made the decision, coming from the traditional VC venture capital field, there must have been a lot of different voices, right?
Jason : It is true that many people do not understand. Even now, some friends still ask me why I made the decision at that time. But I think finance is nothing more than innovation on both ends of capital and assets, and we must grasp one end. In the early years, Sequoia China and Hillhouse Capital also followed the wave of China's two major industries, the Internet and healthcare. If cryptocurrency develops, we will have the same level of opportunity, but it will take time. Our fund is less than two years old, and everything is just beginning.
Foresight News: So what is NDV’s positioning in the market?
Jason : I just mentioned that the essence of finance is to innovate on the capital and asset sides. NDV’s positioning is essentially to do two things:
1) Bringing traditional financial money into Crypto
2) Bringing excellent assets into Crypto
We have done the first thing through stock funds. As the US regulatory environment changes, the second thing can also be paid attention to. The management changes of the US SEC may bring a new opportunity to Crypto. When tokens can pay dividends and can be issued at a lower cost and in compliance, it may bring new changes to the world of currency. I am seriously studying which assets may bring new changes. This will be a big theme in the next few years.
The Future of Bitcoin: A National Reserve Asset?
Foresight News: What changes may occur in the cryptocurrency market after Trump takes office?
Jason : I think the most important thing is that the SEC chairman may be replaced. Gary is very likely to resign (Editor's note: Gary announced his resignation shortly after the interview). This may change the regulatory policy of the Bitcoin market. As for market feedback, if the Democrats were elected, the rise might be more moderate. Now that the Trump administration's policies are more friendly, the market is running fast, which is difficult to predict.
In this election, the Republican Party won the majority support of both the House and Senate and the Supreme Court. Only two presidents in American history have received such treatment - Lincoln and Roosevelt. Now the third is Trump. In addition, many people around Trump hold a large amount of Bitcoin, including Vice President JD Vance, Musk, and Peter Thiel behind Vance.
If the U.S. Congress begins discussing using the Federal Reserve budget to purchase Bitcoin, even if it is just a discussion, the price of Bitcoin may rise sharply, and it is possible that the price of one Bitcoin will reach $200,000 to $300,000 at that time, but it is not certain whether this will be a priority option for the Trump administration.
Foresight News: Bitcoin is now showing a trend of developing from digital gold to a national strategic reserve asset. What do you think?
Jason : I can’t talk about specific institutions, but there are indeed some sovereign funds that are discussing it. After talking to sovereign funds in some medium-sized countries, they are not yet at the stage of using Bitcoin as a strategic reserve. I even think that the United States may move faster. Some sovereign funds will be more cautious because of their previous failed investments in exchanges or related companies. For now, we will wait and see what the United States does.
However, once the market changes, this trend may be faster than we think. I originally thought this might be a story that takes six years to wait, but maybe it can be completed in two years.
Foresight News: Will these traditional funds invest directly in Bitcoin itself?
Jason : I rarely invest directly in Bitcoin itself. The investment committee members of many university funds and pension funds I have contacted are mostly composed of members between 60 and 70 years old. For them, Bitcoin is a new thing that is difficult to understand, but if you lobby for it as a new technology field, the acceptance will be much better. At this time, they may be willing to invest in related companies rather than Bitcoin itself. But the passage of ETFs will allow institutional investors to allocate more compliantly to BTC, which is why this round of bull market is a "Bitcoin bull".
Ethereum is Alibaba, Solana is Pinduoduo?
Foresight News: Your strategy doesn’t seem to involve much Ethereum ETF. In the last cycle, Ethereum’s growth far exceeded Bitcoin, but now people are very dissatisfied with Ethereum. What are your considerations behind not touching Ethereum?
Jason : When introducing the world of cryptocurrency to traditional funds, I found that it was already difficult for them to understand Bitcoin, and it was even more difficult for them to understand Ethereum. And my investment logic tends to invest in things that change, such as X factors that can change the market ranking order, such as Pinduoduo, which came from behind and stirred up the pattern of e-commerce. I think Ethereum has no substantial innovation or large-scale application now, which can be felt from the market heat and capital flow. On the contrary, Solana has a bit of Pinduoduo's flavor. Although I don't hold Solana, I like this kind of story of change.
Foresight News: What is your current personal asset allocation structure?
Jason : When I founded NDV, I invested almost all my liquid assets in cryptocurrencies, except for houses or assets in the primary market. I think it is the best way to explain to LPs that I put most of my personal liquid funds into my own fund. Currently, the ratio of Bitcoin to other cryptocurrencies in assets is about 5:1 to 4:1.
All non-Bitcoin projects are projects done by founders I know well and have strong capabilities, or recommended by friends. For example, I wrote on X in early October that I bought a Meme recommended by my partner Christian, and it has increased by about 20 times from the bottom to now. The core of this is trust transmission, what I think is being done by reliable people, or endorsed by people I trust very much. But when I bought these, I regarded them as venture capital, and they were positions that I was willing to bear losses.
Foresight News: What are your plans for the next year?
Jason : I have promised the investors of the first fund that I will liquidate the fund at the peak of the 4-year cycle of cryptocurrency. I personally think that the peak should appear within the next 12 months, depending on the macro environment and policy changes. After that, I will seriously discuss the matter of bringing Web2 to Web3 mentioned earlier.
