Dialogue with NDV Founder: The tech circle's homegrown companies have become the main force entering Asia, is it currently the latter part of the bear market?

Interview: The Round Trip

Editing &整理: Yuliya, PANews

Amid the complex backdrop of the approval of Bitcoin spot ETFs and the accelerating influx of institutional funds, while global macro interest rates remain high, the traditional investment paradigm in the crypto market is facing profound challenges. When the old map of the “four-year cycle” may no longer apply, investors are urgently seeking a brand-new navigation chart to cut through the fog and find certainty across bull and bear markets. Jason Huang, Founding Partner of NextGen Digital Ventures (NDV), with his investment discipline forged in traditional finance, offers a unique value investing perspective for the market.

With over a decade of venture capital experience at top institutions such as Huaxing Capital, Qiming Venture Partners, and BlueChilli Ventures, he achieved stellar results with the first fund of the NDV crypto equity fund, outperforming Bitcoin by 60%-70%. In the new series Founder’s Talk of “The Round Trip” jointly produced by PANews and Web3.com Ventures, host John Scianna and Cassidy Huang invited Jason Huang. He shared why he resolutely entered the crypto industry at the end of a bull market and expressed his unique insights on the current market cycle, focusing on how to apply classic value investing principles to crypto asset valuation, such as investing in Upbit (a exchange still undervalued compared to Coinbase in market cap), to pursue excess returns driven by value reversion.

Bear markets are the best investment opportunities; Asian allocations remain conservative

Host: Welcome Jason to this episode. The timing of your entry into the crypto industry is quite interesting—it was right at the end of the previous bull market, then you experienced a full bear market, and now the market seems to be in a consolidation phase. Looking back, do you regret your initial decision?

Jason: Of course not. First of all, I always believe that bear markets are the best time to invest. We were very fortunate that NDV’s first fund was officially launched in March 2023, when Bitcoin was around $30,000. Then, before the major rebound in February this year, we completed the exit and liquidation of the first fund. You could say that our first fund performed very well, returning close to 4 times the initial investment, mainly through equity in the crypto sector.

I think at this stage, it’s very different from when I first entered. Back then, I had to spend a lot of time convincing clients that crypto assets were worth allocating to, even if it was just 1%. But now, especially after the approval of Bitcoin spot ETFs, institutional interest has risen significantly. Our current discussions with clients have shifted from “whether to invest” to “how much to allocate” in crypto assets.

Host: And what do you observe about their current allocation ratios? Has this changed in recent months?

Jason: I live mostly in Asia, where overall, people’s allocation to crypto assets remains low, still in very early stages. I** most people I encounter have less than 1% of their total assets allocated to crypto. Now, I usually advise them to raise that to around 5%.** I believe this is a more conservative and balanced approach for them.

Limited impact from potential selling pressures; next year may see a rebound rally

Host: Since the beginning of the year, Bitcoin has fallen over 30% from its high. We’re curious—how do traditional Web2 investors now view crypto assets and the entire blockchain industry? Are they still full of interest, or do they see it as a high-risk asset that needs to be reduced?

Jason: I think it varies by individual. For those who entered this year, most have experienced some asset decline and will choose to hold. But if you ask them to add more now, considering the market volatility over the past three months, they might be more cautious.

But for those who had no prior exposure, I believe they are now very eager to start entering. Many are worried about the so-called “four-year cycle,” which has indeed repeated in the past. But my personal view is, we might no longer go through that traditional four-year cycle. The past cycle existed because Bitcoin’s new supply (block reward halving) occurs every four years. But in the current cycle, about 19 million Bitcoins have already been mined, and the new issuance over the next four years will be around only 620,000.** This potential selling pressure is minor compared to the ETF capital inflows we’ve seen in recent years.**

So I believe, Bitcoin today has more or less become more correlated with the US stock market. Considering we are still in a high interest rate environment, once the Fed begins to cut rates next year, I believe a new bull market will kick off. Therefore, I am quite bullish now.

Host: Your bullish logic is interesting. But if we step outside the crypto circle, since crypto assets are highly correlated with US stocks, why should I still take on such high risks to invest in it? Direct investment in AI seems to be much less risky.

Jason: If you compare the performance of different asset classes from a macro perspective, you’ll find that Bitcoin might be the only major asset class with negative returns this year. I even joked that this year we underperformed some Asian emerging markets assets. This is very unusual for Bitcoin, which over the past 12 years has nearly 9 years of being one of the best-performing assets.

So I think, we are actually in the “late stage” of the bear market, and relative to other assets, Bitcoin’s performance has been significantly undervalued. Next year, a rebound rally is very likely. As for AI, honestly, I don’t have a strong view. I was watching an interview with Michael Burry this morning, where he talked about Palantir, and I checked its PE ratio—up to 800… I find it hard to see how that can be considered undervalued.

Tech giants are the main entrants in Asia; Bitcoin and gold benefit from the macro environment

Host: But companies like Nvidia don’t have such crazy P/E ratios. Regarding investor types, I feel Asian investors tend to be more traditional—they’re not even Web1 risk-tolerant, preferring tangible assets like real estate. Moving into AI or crypto seems quite challenging for them. Or do you think they prefer Buffett-style investments, favoring stable, profitable businesses?

Jason: I think that investment philosophy is fine, and I wouldn’t simply categorize all Asian investors as one type. The traditional real estate families you mentioned do prefer tangible assets that generate stable cash flow, but they are also under significant pressure recently.

Most of the families I deal with are from the Chinese tech sector. In their world, success comes from “network effects.”** Globally, aside from Bitcoin, almost no other asset possesses comparable network effects. Bitcoin is likely to become one of the most popular “applications” in the next 10 to 20 years** because it’s an asset that nearly everyone would be willing to hold a certain proportion of. So, from the buyer’s side, the main entrants into the Asian market now are these tech-focused family offices.

Host: Do you think these tech sector family offices are increasing their Bitcoin allocations? Especially now, is there a strong demand to further increase holdings?

Jason: If we just look at Bitcoin itself, I think everyone has realized that the US government will keep “printing money,” so gold and Bitcoin are undoubtedly direct beneficiaries of this environment—no doubt about that. Among people I know, at least 80% now understand Bitcoin’s role as a “store of value.”

As for other crypto assets, I think the understanding and acceptance are still somewhat “question marks.” But personally, I believe crypto exchanges and stablecoins are the true “business models” of this industry. For those investing in tech stocks, understanding these models isn’t difficult.

ETF restructuring buy-in logic, DAT more like regulatory arbitrage

Host: You mentioned earlier that the traditional four-year cycle might have become invalid. But based on past experience, bear markets typically last around three years with 70%-80% retracements from the top. In the last cycle, Bitcoin from the $60,000 high even failed to double. How do you explain this structural change?

Jason: Yes, I think one of the most important structural changes in this cycle is the emergence of Bitcoin spot ETFs. It allowed institutional investors to enter at scale in a compliant manner for the first time. This directly led to several key effects:

• Bitcoin has become more stable: thanks to increased participation from long-term, rational institutional investors.
• No inflow into altcoins: ETFs form a “one-way street” toward Bitcoin; institutional investors dislike assets without cash flow or intrinsic value support. So we hardly see “altseason” anymore.
• Mining costs act as strong support: Currently, Bitcoin’s mining cost is around $70,000–$80,000. I’m not saying the price can’t fall below this, but it’s a very strong psychological support point—many institutional buyers consider this a good entry zone.

These factors together make Bitcoin’s price more stable, making large 75% drawdowns like before less likely.

Host: Since the market structure has changed and volatility has decreased, can Bitcoin still achieve 2x, 3x, or even 5x gains after a bear market, like in the past?

Jason: I think Bitcoin used to rise 5 to 10 times,** partly driven by high leverage, especially retail leverage. When many short positions get liquidated, that fuels the price rally. But now, since ETFs handle most trading volume, such explosive rises will be harder to replicate.

So many ask whether Bitcoin can still outperform in the future. The performance of our first fund actually answers this—outperforming Bitcoin by about 60%-70%.** I believe the reason is, we bet on crypto-related stocks with real value and earnings multiples.** When the market enters an expansion cycle, you benefit from PE multiple expansion and corporate profit growth, which can outperform Bitcoin. Therefore, I think, investing in crypto-related stocks now might be more attractive than before.

Host: You are very optimistic about investing in crypto stocks. But is there systemic risk? For example, Strategy has hinted that if share prices fall below NAV, they might have to sell Bitcoin to buy back shares. If this happens, could it trigger a confidence crisis in the market?

Jason: That is a potential risk within the ecosystem, but I think it’s manageable. First, I differentiate Strategy from other Digital Asset Funds (DATs). According to their recent disclosures, they have enough cash to cover about 24 months of debt interest, which greatly eases short-term selling pressure.

As for other DATs, I dislike them when they are trading at a premium. Because you can get similar exposure simply by investing in ETFs. The key difference between DATs and ETFs is that DATs can be staked to earn extra yields, which in my view is more like “regulatory arbitrage.” Currently, most DATs are trading at 20%-30% discount, which might offer some arbitrage opportunities but nothing more.

Overall, I’m not very fond of the Ethereum theme. If you consider Gas fees as Ethereum network’s “net profit,” its valuation exceeds 100 times PE—like Palantir in AI. So, I prefer crypto stocks like Coinbase rather than Ethereum itself.

Value investing first, optimistic on RWA and prediction markets

Host: So what is the core investment logic of your new fund (Fund II)?

Jason: Our strategy is to go long on targets we believe are undervalued. While I can’t disclose specific listing targets, for example, we recently significantly increased our position in Korea’s largest crypto exchange, Upbit. The company is valued at about $10 billion but generated over $700 million in net profit in 2024 and paid $200 million in dividends. Its PE ratio is only around 15, whereas globally, profitable exchanges typically trade at 30 to 70 times PE. It’s fully compliant and audited by PwC Korea.

Our fund initially started by buying GBTC at a discount. For me, investing in Upbit is like “GBTC 2.0”—buying a Coinbase-like quality business at a discount. That’s our typical approach: value investing first, then considering future growth potential.

Host: It sounds like you are a very disciplined investor, probably shaped by your experience in traditional finance. In contrast, crypto investors seem very leveraged.

Jason: Yes, but I think there are three things that will “kill” you in crypto: leverage, custody risks, and altcoins. If you add one more, it’s “alcohol,” especially during industry conferences. Like Charlie Munger says, “Stay away from the things that will kill you.” If you can successfully avoid these, you can be among the top 10% of crypto investors.

Host: One last question—looking toward 2026 and beyond, besides being bullish on Bitcoin, what other prospects do you see? Do you think funds will flow back into altcoins?

Jason: I am personally very interested in a particular sector—the penetration of stablecoins.** I see stablecoins as an “upgraded version of banks.”** When all payment channels and banking systems upgrade because of stablecoins, overall transaction costs in the financial network will be drastically reduced.

I am especially watching platforms like Polymarket and all new trading platforms emerging with the rise of stablecoins. I believe there will be lots of innovations here, possibly RWA or other new business models. We might see a “next-generation Stripe” born in crypto, as more and more people hold crypto assets and want to use stablecoins for daily payments. These innovations will create real practical value, very different from the meme narratives of the past few years. I am very optimistic about this field, but we need patience as these companies mature or go public.