Editor: Wu Says Blockchain

Recently, the cryptocurrency market has experienced a significant decline, with Bitcoin dropping below $90,000. Alliance DAO co-founder QwQiao warned in September that the market might need to drop another 50% before forming a solid foundation to re-enter a super bull market cycle.

This podcast features an interview with Jason Huang, founding partner of NextGen Digital Venture (NDV), conducted by Tiger Brokers. The conversation revolves around the important milestone of Bitcoin recently falling below $90,000. From an institutional perspective, Jason analyzes the long-term logic of Bitcoin as an asset class, the short-term triggers for the pullback, and the emotional dynamics of the market. Topics include the impact of ETFs on asset properties, the interplay between macro factors (such as liquidity, interest rate cut expectations, and Trump’s policies) and technical indicators (such as death crosses and leveraged liquidations), the relationship between crypto assets and traditional assets like gold and the Nasdaq, and shares institutional strategies for asset rotation, hedging, and position management.

The NDV Phase I Fund (March 2023 to February 2025) operates within a compliance framework, achieving a cumulative return of approximately 275.5% and completing an orderly liquidation; during the same period, it outperformed Bitcoin. In an interview on September 1, Wu Says warned that the market could see a 30% to 50% pullback.

Jason's Analysis of Bitcoin's Plunge: Short-term Volatility, Optimistic Outlook

Tiger Brokers: Bitcoin's price once fell below the $90,000 mark, the last time it was below $90,000 was in April of this year. Essentially, as of today, it has erased all gains made in 2025, meaning Bitcoin's overall return this year is around -2%. Looking back over the past six weeks, or from October to now, Bitcoin reached a high of $126,000 on October 7, but then plummeted nearly 7% on October 10. That day is referred to as the largest liquidation day in crypto history, with nearly $20 billion in cryptocurrencies being liquidated. Although Bitcoin rebounded to over $110,000 afterward, it has been in a downward trend for the past month and a half, with an overall pullback of about 30%.

I know Jason is one of the most professional investors I know in this field, so I specifically reached out to him today to share his insights. Starting this week, that is, yesterday, Bitcoin's decline accelerated. Technical analysis shows that the price has fallen below the 200-day moving average and triggered what is known as a "death cross." There are also rumors that the Trump administration is reviewing a new tax regulation on Americans' overseas crypto assets, affecting market sentiment. Additionally, some believe that short-term global liquidity issues and a decrease in institutional capital inflows have contributed to this decline. I want to hear Jason's thoughts on this phenomenon. Does yesterday's drop to $90,000 signify a major turning point, or is it just a cyclical behavior?

Jason: I think people tend to overinterpret and react during extreme events in the market. Let me first discuss this from our institutional perspective. First, after the Bitcoin ETF is approved in January 2024, Bitcoin will officially become an asset class and take the stage in mainstream financial markets. At the time of the ETF launch, Bitcoin was around $100,000, and now it has dropped to $90,000. Over the past two and a half years, its returns have been acceptable; in an asset class of about $1 trillion, this return is quite good. My personal view is that, in the long run, Bitcoin remains the digital gold. Gold is an asset class worth about $23 to $25 trillion, while Bitcoin has a total supply of 21 million, so I believe Bitcoin has the potential to grow tenfold in the long run.

Today's pullback actually has several reasons. First, Bitcoin's issuance mechanism has a major cycle every four years, as the new issuance is halved every four years. From 2008 to 2012, the new issuance of Bitcoin was 10 million, while in the current cycle, it is 600,000, and the new issuance is gradually decreasing. Therefore, the selling pressure in each cycle is also decreasing.

I believe that after the Bitcoin ETF is approved, Bitcoin is no longer in a phase where its price is determined by supply but rather by demand. In today's unstable global political and economic environment, Bitcoin is actually a very valuable asset. However, due to the inertia of the four-year cycle, the additional selling pressure at this point is also quite evident. As a colleague mentioned earlier, on October 11, Bitcoin's drop was triggered by Trump tweeting about the possibility of implementing a second tariff trade war, which led to a significant drop. On that day, about $20 billion in cryptocurrencies were liquidated, and many people had leveraged positions. I believe that without Trump's tweet, Bitcoin should be between $130,000 and $150,000 today.

Additionally, there is another factor to note: the UK has seized 60,000 Bitcoins, which are expected to enter the market for sale, leading to market speculation. My view is that after 2024, Bitcoin has experienced two major pullbacks of about 30%. The first was during the yen's interest rate differential trading, which occurred around April to May 2024; the second was in April this year during Trump's first tariff war. Each time after a significant drop, the pullback has been between 30% and 35%, and new highs are typically reached within a few months after each drop.

Today's pullback is about 30%, and I am personally quite optimistic. I believe that Bitcoin, as an asset class, still holds significant value in the long term and will attract investors in the future. Especially after Trump's tariff war, we have clearly seen that gold and Bitcoin recover faster than the Nasdaq, as many people allocate them as the "gold" of digital currencies, but the timing of allocation is usually when prices are low, not high. So looking forward from today, I am quite optimistic.

Moreover, I just shared two charts, and from the charts, you can see that there are many short positions currently. Even if it is a natural deleveraging process, a short-term rebound to $98,000 to $99,000 is reasonable. This is my current short-term view. In the long run, as I have mentioned, my target price is even $1 million.

Technical Analysis and Macroeconomic Factors: Analyzing the Correlation Between Bitcoin and the Nasdaq

Tiger Brokers: I'm not sure if the "death cross" signal is effective in the crypto space. I saw that in April, there was also a death cross when the 50-day line crossed the 200-day line, but this signal has appeared again today. Is this situation valid?

Jason: Personally, I believe that technical analysis is indeed important in market dynamics, but my view is that Bitcoin, as a market close to $2 trillion in assets, has been significantly influenced by macro factors, with liquidity issues being the most important factor. For example, the U.S. unemployment rate data is about to be released in the next few days, which may affect the market's expectations for a rate cut in December, and this is also a key point of contention. Additionally, Nvidia's earnings report is also forthcoming. I believe that recently, Bitcoin has been somewhat dragged down by the Nasdaq, and the Nasdaq's recovery will also help Bitcoin.

Tiger Brokers: But actually, Bitcoin has dropped so much in the past few days, while the Nasdaq has not followed suit; it seems that the price gap between them has not caught up. Do you think the Nasdaq might experience another wave of decline?

Jason: I think this really depends on Nvidia's earnings report. From our backtesting, in particularly panic environments, Bitcoin's movements are about 30% correlated with gold and 70% with the Nasdaq. However, recently, Bitcoin's volatility has basically been following the Nasdaq's movements at double the rate. This is mainly due to market fears regarding the four-year cycle, and many long-term Bitcoin holders are gradually reducing their positions, which is actually quite normal. After all, Bitcoin has gradually become an asset accepted by mainstream financial markets, and the asset turnover between Wall Street and traditional Bitcoin holders is inevitable.

This also partly explains why Bitcoin's performance this year has not been as good as other assets. A few days ago, I conducted a survey among my friends, asking which investment has better odds from the current perspective: the $1.8 trillion Bitcoin or the $4.5 trillion Nvidia. Although I am very optimistic about AI as a major trend, I still think that $4.5 trillion Nvidia is quite substantial.

Institutional Response to Volatility: Asset Rotation and Risk Management Strategies

Tiger Brokers: I also think that $5 trillion is indeed a bit daunting. So I want to ask you, as professional investors, what kind of hedging operations do institutions undertake in such volatile markets? Or do you maintain your positions? For example, in the past six weeks of significant volatility, expecting continued fluctuations, especially leading up to the Federal Reserve's meeting in December, what actions will you take?

Jason: Actually, our style and goal are to hope that Bitcoin's performance can continue to excel. Therefore, in the face of black swan events and downward trends, we feel that being able to follow Bitcoin's movements is already good enough. But in this process, our approach is to think carefully; during the overall decline of crypto assets, stocks usually drop more sharply than Bitcoin. However, for small-cap, innovative, and leveraged stocks, we need to consider which type of asset has more Alpha. Therefore, we have been focusing on selecting high-quality Alpha to enhance performance. Overall, our strategy is more about considering when to rotate positions between Bitcoin and Ethereum and crypto-related stocks. That's roughly it.

Tiger Brokers: So currently, you haven't switched to individual stocks and are still maintaining your crypto positions?

Jason: I think we still need to wait for the market to bottom out. Our overall strategy involves rotating among three asset classes. One is holding native tokens like Bitcoin and Ethereum; another is investing in stocks related to Bitcoin; and the last is that we do not hold dollars but prefer to hold gold as an asset class. Because in the long run, I believe gold retains value better than the dollar. Although gold has risen significantly this year, I believe that in the coming time, whether due to geopolitical uncertainties, the competition between countries, or the continued printing of dollars, gold remains a long-term choice with more value retention potential than the dollar. Therefore, we mainly rotate allocations among these three asset classes.

Tiger Brokers: Let me summarize your views. From what you just said, I can understand that you believe Bitcoin has no long-term issues, and every time there is a pullback of over 35%, it is likely to rebound and reach new highs. But in the short term, this rapid decline may be due to leverage and other factors, but it also reflects that the market has already "priced in" many negative factors or liquidity issues, so it may not drop further in the short term, but rather be optimistic and may experience a volatile rebound. Is that how the situation will be?

Jason: I think, or rather, my view leans towards optimism and a bullish, volatile perspective. Of course, all issues cannot remain completely unchanged. So I believe that as long as liquidity remains loose in the future and interest rate cut policies are implemented, we have no reason to expect a significant pullback. Bitcoin is the ultimate embodiment of a liquidity asset; as long as the dollar continues to be printed, Bitcoin is in a favorable position because it is limited, finite, and non-renewable, unique. This aspect is very similar to gold's properties, but Bitcoin also has an additional layer of technology stock factors. Those who originally did not accept, understand, or know about Bitcoin are gradually coming to understand and accept it.

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