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https://www.wublock123.com/articles/interview-ndv-founder-jason-microstrategy-overleveraged-wait-panic-sell-for-dip-59136
In this episode of the WuBlockchain Podcast, NDV founder Jason Huang discusses the recent decline in Bitcoin, Strategy’s Bitcoin sales, macroeconomic risks, and opportunities in the crypto industry. Jason believes that the first half of the current crypto downturn was driven primarily by residual selling pressure from Bitcoin’s four-year cycle, while the recent decline has also been compounded by a pullback in U.S. equities, tightening liquidity, and debt pressure at Strategy. In his view, the market has not yet reached a true bottom. Bear market bottoms often require a defining event on the scale of the FTX collapse, pushing the market into a state of widespread despair in which almost no one is still discussing crypto.
Regarding investment strategy, Jason says NDV’s second fund has returned more than 20% this year and has traded commodities including oil, gold, and silver in addition to crypto assets. He remains cautious about AI stocks, noting that although he is a heavy user of AI, he does not believe he has an edge in trading the sector. He is also concerned about crowded positioning and bubble risks in U.S. equities, semiconductors, and the enthusiasm surrounding a potential SpaceX IPO. Despite his bearish short-term outlook, he remains optimistic about the long-term value of stablecoins, which he considers one of the clearest crypto innovations with genuine real-world utility and significant room for further adoption.
Strategy’s Bitcoin Sale Triggers Preemptive Selling as BTC Enters a Liquidity Squeeze
Mao Di: In the previous episode, you predicted that the crypto market could undergo a significant correction in 2026. Bitcoin has continued to fall recently. Is this decline consistent with what you expected at the time? And how do you view the market at its current level? I saw that you mentioned around $48,000 on X.
Jason: Even $48,000 may not be the bottom. I did not go into much detail at the time because every downturn has a different underlying logic. It was only recently, especially over the past two days, that I began to feel this decline was truly unfolding in line with what I expected last September.
The first half looked more like concentrated selling driven by Bitcoin’s four-year cycle. Many long-term traders tend to exit around these cyclical turning points, which can trigger a rush for the exits. At the same time, U.S. stocks remained resilient for much longer than I expected, but I think their correction is only now beginning. Against that backdrop, investors who also hold BTC or IBIT will often choose to raise liquidity first.
I also did not expect MSTR to hold up for this long. Its flywheel mechanism only really began to break down recently. That is why I think this decline could be larger than the market expects.
Mao Di: Bitcoin’s sharp decline over the past two days was, to some extent, triggered by Strategy itself. It actually sold only 32 BTC, but the market reaction was significant. Some analysts believe this was more like a test of market resilience and that the situation remains under Strategy’s control. What do you think?
Jason: I disagree. People often assume founders are more powerful than they really are, as though they can control everything. But that is not the case. When facing an uncertain future, entrepreneurs often have no choice but to make judgments under uncertainty.
Strategy’s original model was to borrow money, issue preferred stock, and then raise additional equity to buy Bitcoin. During an upcycle, this model works because rising Bitcoin prices can cover interest and dividend payments, while the company’s shares trade at a premium, creating a positive flywheel.
But when Bitcoin falls rapidly, the stock moves from a premium to a discount, and the company still has to make real interest and dividend payments, that mechanism turns into a negative feedback loop.
I think Strategy has overplayed its hand to some extent. It originally held around $2 billion in cash to cover preferred-stock dividends for the next two years. But it later dealt early with a convertible bond due in 2029, consuming about $1.2 billion in one go. As a result, what had been a two-year buffer was reduced to just four months.
Under those circumstances, it has three options: default on its bonds, default on its preferred stock, or sell Bitcoin. The sale of those 32 BTC already shows which option it chose. It will protect creditors first, shareholders second, and Bitcoin holders last.
What the market is really worried about is not those 32 BTC, but the more than 800,000 BTC Strategy holds in total. The concern is the much greater potential selling pressure that could follow.
And Strategy is not the only seller. Some other large holders have also been selling recently because everyone knows that MSTR represents the largest source of potential selling pressure. Rather than wait for it to sell, they would rather exit first. In essence, this downturn is being driven by the market selling in anticipation of MSTR.
The key question over the next four months is how Strategy will deal with its debt obligations and preferred-stock dividends. It has to address them, although the method remains uncertain. If someone is later willing to acquire a large block of Bitcoin at a discount, preventing Strategy from continuing to sell into the market, I think that level would most likely be close to a short-term bottom because the company would have regained its ability to meet its payment obligations.
Mao Di: But if it had already decided to sell Bitcoin to cover preferred-stock dividends, why did it not sell a larger amount at once? Why sell such a small amount and send a signal to the market, only to let everyone else sell ahead of it?
Jason: That comes down to a founder’s judgment at a critical moment. He may have believed that selling too much at once would cause even greater panic, so it would be better to sell a small amount first. That would send a signal to the market while also reassuring preferred-stock investors. But ultimately, that judgment spiraled out of control.
This was never something he could have discussed widely beforehand. He could only anticipate how the market might interpret the move and then make what he believed was the best decision at the time.
Even today, we cannot prove whether the market would have reacted better if he had sold more at once. The market’s interpretation of information changes dynamically. He could make only one choice, not run the same experiment repeatedly.
Fund Returns, Commodity Positions, and the Inflation Trade
Mao Di: When we first started talking, you mentioned that you had recently been taking short positions. Bitcoin’s decline must have generated fairly strong returns for you. How is your second fund performing overall?
Jason: Our returns this year certainly cannot compare with those made by trading semiconductor or AI stocks. We are up a little over 20%, which is still respectable. Bitcoin has fallen by more than 30% overall this year, while we have generated a positive return of around 20%, so we have outperformed Bitcoin by roughly 50 to 60 percentage points. Our first fund also outperformed Bitcoin by around 60 to 70 percentage points. At this point, we have a chance of surpassing that figure.
Mao Di: So the strategy for this fund is broadly similar to that of the first fund. You are still focused on Bitcoin and crypto-related assets without investing in AI-related products or stocks, correct?
Jason: We did not invest in AI at all. To be honest, I regret that a little. I am a heavy AI user and pay for nearly every good product that offers a paid subscription, but I ultimately did not buy any related assets. To some extent, my actions did not align with my convictions.
However, we have traded some other assets this year, including oil, gold, and silver. For example, part of yesterday’s return came from shorting silver. I think precious metals and crypto assets follow similar trading dynamics. Both are driven by supply and demand as well as major events, and both involve high leverage. The difference is that precious metals move more slowly and are easier to analyze.
We have therefore allocated some of our attention to commodities this year. Overall, I think commodities are entering a particularly interesting phase. In addition to precious metals, inflation has been another major theme this year. Oil may represent the first wave, with the effects gradually spreading to other categories.
Mao Di: I have also been discussing inflation with others recently. One view is that the productivity gains created by AI could exert a deflationary effect to some extent. What do you think?
Jason: At least for now, prices are not showing any clear signs of deflation. I agree that AI has offset some inflationary pressure, but many forms of real-world consumption will not disappear simply because of AI.
For example, rising oil prices directly increase logistics and production costs. Fuel surcharges on airline tickets are a straightforward example, and that pressure will continue to spread into more areas.
I also think the “deflation” created by AI is more evident in employment. In other words, it may create unemployment. The reality may not be that AI makes life easier for everyone. Instead, wealthy people may earn more through AI-related assets, while ordinary people continue to bear the pressure of inflation and rising living costs.
The U.S. political system will most likely eventually respond to this problem, perhaps by using redistribution to ease the tensions. But if it reaches that point, inflation could become even more pronounced.
That is the contradiction the market is essentially trading right now: whether inflation arrives first, or AI first delivers on its promise of improving efficiency and lowering costs. For now, the AI trade remains stronger, but events such as a SpaceX IPO could also drain further liquidity from the market.
Many of these themes may ultimately play out, but in trading, the hardest part is never identifying the direction. It is deciding when to enter, which instrument to use, and how to structure the position.
World Cup Trading Cards: Turning “Investing in a Person” Into a Standardized Trade
Mao Di: In addition to the fund, I saw that you are working on a project involving sports trading cards. I previously listened to a podcast in which you discussed the subject, but I did not fully understand it. I do not really follow football or basketball, and I do not collect cards, so could you briefly explain what this market is and how it works?
Jason: Put simply, sports trading cards offer a highly standardized way to “invest in a person” or “invest in an IP.” They follow a fixed issuance mechanism and cannot be issued without limit, because excessive supply would destroy their value. At its core, this is a market built around limited supply and long-term operation.
I have always believed that sports and anime IP are consumer products for this generation. Young people grow up admiring particular athletes or anime characters, and once they have spending power, they are willing to spend money on those idols. Sports trading cards emerged from that dynamic. They have both collectible and investment value, which is tied to an athlete’s performance, development, and personal appeal.
Mao Di: So the athletes authorize companies to issue these cards?
Jason: Yes. Today, sports card companies generally obtain licenses from the relevant leagues and then handle issuance. The industry has experienced overproduction in the past, which made cards from certain years nearly worthless. As a result, everyone now understands that supply has to be controlled.
Mao Di: Do the issuing companies mainly earn money from the initial sales, with little involvement in subsequent trading?
Jason: The secondary market is already highly developed. There are trading platforms, auction houses, and grading companies. Grading is crucial because a card’s condition directly affects its price. The market has therefore developed a complete division of labor, with issuance, circulation, and grading handled independently.
Mao Di: So your project is mainly focused on the trading layer?
Jason: Yes, but our approach differs from that of a typical platform. Because I come from a financial background, I view sports cards primarily as investment assets. We focus on the rarest cards, such as “1-of-1” cards, of which only one exists in the world. Their value ultimately depends on how the athlete develops, including their performance, achievements, and market popularity.
Mao Di: You have mentioned the card’s “year” several times. Does that mean that once the cards for a particular year have been issued, no more can ever be added?
Jason: Correct. A card’s value is closely tied to its year. Once that year has passed, the edition is fixed and its supply cannot increase. In that sense, the logic is somewhat similar to that of baijiu or other aged spirits.
Mao Di: But from an outsider’s perspective, this still sounds somewhat similar to NFTs, particularly in terms of IP and fractional trading. What is the biggest difference between sports cards and NFTs?
Jason: The difference is substantial. Many NFT projects handled both issuance and trading. They made money too quickly and consequently had little incentive to continue developing the IP. Sports trading cards are different because they are backed by established IP and real sports leagues that operate over the long term. Those leagues continuously generate attention, so the market rests on a completely different foundation.
Stablecoins, the AI Bubble, and Assessing Crypto’s Bear Market Bottom
Mao Di: Why do you think so many exchanges are now entering prediction markets? Many people also believe prediction markets could become one of the most important areas in crypto over the coming period. What is your view?
Jason: On the surface, it is because prediction markets offer a trading model that people are willing to participate in. But the deeper reason is that the widespread adoption of stablecoins and wallets has significantly lowered the barriers to launching new types of exchanges.
Operating a centralized exchange requires handling KYC, user management, asset custody, hacking risks, regulation, and a whole range of other costly issues. On a platform such as Polymarket, however, funds remain in users’ own wallets, while the platform only matches trades. This represents more than the rise of prediction markets. It signals the emergence of an entirely new category of exchanges. Following that logic, centralized exchanges could face considerable disruption in the future.
Mao Di: You are a heavy AI user, but neither you personally nor your fund has invested in AI-related stocks. Why?
Jason: For one thing, many of the products I actually use regularly are not yet publicly listed. For another, I generally avoid areas in which I do not have a trading edge. I understand software better, but the most heavily traded part of the market has been the hardware supply chain, including optical modules and semiconductors. I have not researched those areas enough or made a dedicated effort to catch up, so I did not participate.
Mao Di: AI hardware stocks have fallen sharply recently. Do you think this is just a normal correction, or is the bubble still in its early stages?
Jason: I do not want to make a judgment because I have not researched it enough. But after such a large rise over a short period, a correction is perfectly normal. How deep it will be is difficult to say. Generally, the faster something rises, the faster it falls, because a lot of speculative capital is inevitably involved.
Mao Di: You previously mentioned several highly crowded trades in the market. How do you view them now?
Jason: Semiconductors are what I have been watching most closely recently. The trade has become extremely crowded, and I think this phase of the rally is almost over. It is difficult to say whether the correction will be 20% or 30%, but crowded trades like this often shift from unanimous bullishness to a rush for the exits.
Mao Di: Between crypto and AI, which currently offers the better risk-reward profile?
Jason: I do not think the crypto market has completed its shakeout, and it will be difficult for it to stage a genuine recovery in the short term. Many people look for optimistic explanations whenever prices fall, but based on supply, demand, and the level of panic, I still do not see a true bottom. We may not be far from the bottom in terms of time, but I do not think prices have fallen far enough. At the very least, $60,000 may not hold.
Mao Di: So we have not yet reached a stage comparable to the FTX collapse?
Jason: Not at all. A true bear market bottom usually requires a defining event that creates a sense that “crypto is finished.” It does not necessarily have to be an exchange collapsing, but a player of comparable significance probably needs to run into serious trouble. Right now, people have simply become numb to the losses. They have not reached genuine despair.
A true bottom usually arrives when you and everyone around you are in extreme pain and no longer want to look at the market.
Mao Di: Many people are also deeply pessimistic about the crypto industry itself. They feel that after all these years, it has failed to produce anything genuinely new.
Jason: I disagree. Stablecoins are a very clear achievement. They have genuinely made something “faster and better,” which, in my view, makes them the clearest area of innovation in crypto. I am also very optimistic about the sector because its penetration remains low. As long as the market remains far from its full potential, it would not be surprising to see several new players emerge.
Mao Di: You also mentioned that you are bearish on U.S. stocks. Is that because you are generally pessimistic about the macroeconomic environment?
Jason: I simply think it is unreasonable for a market to rise continuously without falling. Sentiment has become somewhat overheated. When even ordinary people start thinking they might as well speculate in stocks, that is usually a dangerous stage. It is not limited to U.S. equities. Hong Kong stocks have also become extremely speculative under the AI narrative.
Some time ago, I heard an investor say that after carefully reviewing SpaceX’s listing materials, he thought it looked like a company on the verge of bankruptcy. The more I thought about it, the more I felt the argument was not entirely unreasonable. Musk has told an enormous story around SpaceX, even suggesting that much of its future revenue will come from AI. If that is the case, investors might as well buy OpenAI directly. So I think the bubble component is fairly obvious.
An IPO is often the last major opportunity for founders and their teams to raise the largest possible amount of money from the market within a short period. Naturally, they will try to list when the market is at its hottest. Musk is also one of the people who understands capital markets best, and he never enters a deal in which he expects to lose money. So I do not really believe that an IPO would leave substantial profits in the secondary market for ordinary investors.
Mao Di: People have indeed become somewhat dependent on the assumption that the same strategy will keep working.
Jason: Exactly. It is as though all you have to do is buy and hold, and you will make money. I simply think that this inertia has itself become dangerous.
Market Outlook: Wait for a True Panic Washout Before Buying the Dip
Mao Di: Finally, could you share your outlook for Bitcoin and Ethereum over the next year? After all, your prediction last year was fairly accurate.
Jason: I am extremely bearish on Ethereum. I cannot even see where its bottom might be. As for Bitcoin, over a one-year horizon, I think the price may ultimately end up close to where it is now, but it will most likely fall sharply first and then rebound significantly.
In other words, we may not be far from the bear market bottom in terms of time, but prices may not have fallen far enough. Even $48,000 may not hold.
Mao Di: So you are more inclined to wait for a bottom triggered by a major event?
Jason: Yes. A true bottom is usually accompanied by a defining event. When it happens, you will not need to check the charts or read the news. You will know that something has gone wrong because your social feeds will be flooded with posts and angry reactions. The FTX collapse was an event of that magnitude.
We are not there yet. Prices are falling, but people are more numb than genuinely panicked. A true bear market bottom usually appears only after the panic has been fully released and nobody wants to look at the market anymore. In hindsight, that kind of bottom is obvious, but at the time, you usually have no desire to buy.
Mao Di: When nobody wants to buy, how do you convince yourself to take action?
Jason: I still focus on penetration and the spread of consensus. As long as something has network effects, remains accepted by only a small group of core users, and is still far from reaching its adoption ceiling, the story is not over. That applies to Bitcoin, and it also applies to sports trading cards.
So I first establish a fundamental anchor in my mind: Is this still at an early stage, and does it still have long-term room to grow? The specific questions of how to buy and how much of a drawdown I can tolerate belong to the trading side.
When pessimism truly reaches its peak, it is better not to keep staring at the market. I think one effective approach is to step away, perhaps by going on a trip. Set your target price in advance, buy when the market reaches it, and then stop looking again. Watching the market every day will inevitably affect your emotions and interfere with your judgment. For long-term holders, staying away from the noise is often more important.
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