Dialogue with trader Jason: How to obtain alpha returns through beta targets?

The following text is compiled from the series Twitter Space #Conversation Trader, Host FC, Founding Partner of SevenX Ventures, Twitter @FC_0X0

Guests of this issue: Jason Huang, NDV Founding Partner, Twitter @Jhy256

"Permeability" logic allows Internet investors All in Crypto

In his own words, Jason's background is, as a Internet VC, he worked in Huaxing Capital and Qiming Venture Capital one after another. Later, he went to the home office of Alibaba Chairman Cai Chongxin, who was responsible for all domestic investments.

Jason's first purchase of coins was the ICO wave in 2017, but his understanding of Crypto was still in the "a bit like a scam", so he left after making a little money.

Let’s get to know Crypto again, which was a “trail” from the big V’s “lunch” in 20 years: Bitcoin is a very long-term good asset and should be held for a long time. The logic that makes Jason "brainwashed" successfully is:

When Alibaba went public, the penetration rate of e-commerce in China was 3%, and about ten years later it was 30%, an increase of ten times. Crypto's penetration rate at that time was 100 million to 200 million people, and the world's population was 6 billion, and penetration of 2 billion should be a simple and replicable and fast process. In fact, Crypto's penetration rate is only about 600 million people today, and there is still a lot of room.

Time has come 23 years. This year, Jason left the family office and founded his own fund NDV. He entered the market at about 29,000 Bitcoin. Today, in about 20 months, he has received a return of 4.3 times + , outperformed BTC.

The trading strategy Jason used is actually very simple in looking back.

Why is $MSTR selected?

Since founding his own fund, Jason has adhered to the logic of "penetration rate". "What I buy is called institutional penetration."

So they only did one thing in 2023, which was to buy GBTC. Because GBTC had a discount on Bitcoin at that time, they outperformed Bitcoin at that stage.

After the ETF passed and the discount recovered, Jason began to think that after institutions bought Bitcoin ETFs, they would want to have some configurations that would excite them more. What would that be?

The answer is: it is a stock related to Crypto.

So the options in front of you are mining stocks, Coinbase, and MSTR. After some trial and error, Jason and the others chose MSTR for only one reason: the simpler the logic, the easier it is to build consensus, at least when everyone is just starting to learn Crypto.

For companies like Coinbase with fundamentals, many institutions will study their fundamentals and calculate their PE, which is not easy to buy; mining stocks are another logic, although theoretically speaking, small-cap stocks may pull It is faster, but from the results, it is not true today, because once there are more than one mining stock, it is easy to disperse the consensus.

From the perspective of results, we can also see that MSTR actually outperformed Nvidia, outperformed Bitcoin, and outperformed a lot of things.

What do you care about most about the "big money" in the market?

In Jason's definition, big money goes from sovereign funds to insurance companies, university funds, endowments and various hedge funds. These people have a Crypto penetration rate of less than one thousandth of today.

What big money cares about is nothing more than simple and easy to understand and liquid.

So at this stage of today, their positions can only be Bitcoin, or only those stocks, and the better the liquidity of the stocks, the more consensus they will gather, because big money needs to be considered in and out.

“So my logic is particularly simple: where there is a consensus that is simple and easy to spread, where there is good liquidity, there may be a big influx of money.

In fact, this is why XRP and SOL can pay more attention, especially XRP, which has been around for a long time, has a huge market value and is very liquid. From time to time, there is a lawsuit to attract everyone's attention.

In the final analysis, finance is a game that provides special demand, so you can see what big money is thinking. All things that require great effort to build new consensus are not worth gambling. As long as you have a big position on some correct assets, you can outperform others. ”

When will the bull market "top"?

In fact, Jason's Twitter has verified the accuracy of his judgment on large-cycle trends many times. Jason still thinks about the top of the bull market based on the logic of "what big money is thinking about". He believes that from the issuance of ETFs to the present, BTC has risen from 40,000 to around 100,000, and the market has flowed in 30-50 billion US dollars. If it wants to reach 150,000, it will require at least an equal amount of money.

Where does the money come from?

Look at the sovereign fund first. Basically, only the United States will issue first. Others will pay such a large amount of money, or in other words, only the United States can afford it. So Jason judges that neither the Federal Reserve nor the Treasury will issue it in the short term. This money.

The only remaining "big buyers" that can be seen at the moment may be the state government, because each state government has been discussing this thing recently. If we estimate that a large state can spend 2 billion US dollars, 50 states can spend at least 50 billion to 100 billion.

"So if I do a simple math problem, my position in my mind (top) is around 150,000."

Regarding the macro chain data that can be referenced, Jason recommends following Twitter @Murphychen888
.

In addition, Jason feels that today's market is actually very "transparent", because in the context of the US dominant market, they announced the dates of all core events in advance, and there will be no sudden issuance of government decrees. So the participants were given enough time to think about whether the market was taking the lead, whether it was a game in advance, and what kind of state it would be if anything was higher than expectations and lower than expectations.

"The macro judgment, combined with the data on Bitcoin supply and demand, is actually very clear about what kind of story the market wants to tell."

Will the four-year cycle still exist?

Regarding the changes that will occur in the market in the future, Jason believes that the cycle will still exist, but there will be no more four-year cycles, because in fact, the reduction in selling pressure on the supply side has become much weaker, and "once every four years" is more like A strong mental mark.

At the same time, long money will come in, the market will move towards US stock market, and various coins will gradually have their own independent narratives and trends, and will no longer rise and fall in the same frequency as BTC.

Because Jason judged that the most important thing the Trump administration will do next is actually to redefine what token is. Tokens will not be securities in the future, or even tokens are allowed to distribute dividends and repurchase. When these tokens are allowed to have their own distribution logic, they may be able to step out of their own independent narrative.

"Crypto will not be as rotating as the A-share sector, but will be more like the strong American stock market. The essence is that market participants have changed."

How to choose a small currency? Don't look at the fundamentals, just

choose the Founder

Jason also has a simple selection principle for altcoins trading: under the general trend, only choose the tokens of Founder you know.

"Actually, I think most of the founders in Crypto will leave after cutting. So as long as he doesn't want to leave after cutting, as long as he continues to work, the chance cost you lose is really only."

As for Founder's judgment, Jason believes that there is no systematic way to screen out all "good people", so he will focus on one trait, that is, "whether he has high growth potential."

"He is a thief-unreliable sales type, or a thrilling work type. I don't think I am repulsive. As long as he is growing, as long as he can give me a new understanding every time, and he is Actually doing it, I think it's a good founder for me."

How to continue to grow? A book, a road, a person

Jason's way of keeping himself progress is: admit his mistakes and learn to face himself honestly. He recommends everyone to read "The Road No One Walks", a book that changed his life and taught him to do something wrong, neither rely on others nor punish himself excessively.

"Acknowledging mistakes is the beginning of changing one's own mistakes. It is awesome to be able to admit mistakes bravely."

Focusing on trading, Jason's eyes on how to keep progress is: practice, iterate, and review.

There is a very difficult way that he has not done well himself, but is very helpful to trading, which is to write down the reasons for each transaction and continue to accumulate and review them. This is also a valuable experience he has learned in first-level investment.

Finally, Jason recommends that the trader that he pays attention to is lunch, which constitutes a lot of Jason's basic understanding of Crypto, and he knows very well what to take and give up for lunch. At the same time, he also made Jason realize that he was not a talented trader like that, so he had to figure out what his advantages were in trading and then maximize it.

FC: The way I keep improving is to put money in

I also shared my ideas and practices with Jason about how to keep improving and stay sensitive to new things.

I think everyone feels differently about the emergence of new things, especially the transformation of potential energy. Some people read data and research reports, and some people have to stay in the market, and the way I don’t lose the trend is , put the money in it.

The specific method is, the first step is to build a "zero fund", follow smart people, smart groups and smart money, add some basic judgments based on the purchase of the target, and put the money in, if most of the targets have increased , that means I want to pay attention to this track.

The second step is to put a "ten times fund" and put more money than the "zero fund", and then place ten times bet on the leading target that emerges from the "zero fund". After iterating for a while, I found that this is the right way to keep up with the market rhythm.

Especially now, on-chain transactions are a "accelerated currency circle", and you don't have time to study it. For example, GOAT fell from 200 million to 100 million US dollars, and after washing the market in about four or five days, it will reach 1 billion. If you don’t start tracking from a market value of several million, you will most likely not be able to find this context.

So what I am doing now is to put the money in, and you can feel it below, and then you can quickly make decisions and position on it.

Written at the end

In fact, the biggest feeling of chatting with Jason is that we are all highly sensitive people, and most of the people who do transactions may be in this state. The biggest pleasure of doing transactions is to compete with yourself. You don’t need to know too many people. Just go to some people you are interested in to chat. It’s very free.

Thanks again to Jason for participating in the dialogue trader. Previous Space Audio will be updated in the Small Universe one after another to search for dialogue trader.