Interview with Bitwise Trader Jeff Park: Young People Don't Trust the Stock Market—Investing in Bitcoin Is a Bet Against Fiat Currency Depreciation
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Interview with Bitwise Trader Jeff Park: Young People Don't Trust the Stock Market—Investing in Bitcoin Is a Bet Against Fiat Currency Depreciation
The key to value is that it must be a scarce physical asset that cannot be easily created.
Navigating Web3 tides with focused insightsCompiled & Translated: TechFlow
Guest: Jeff Park, Portfolio Manager at Bitwise Asset Management
Hosts: Bonnie & David Lin
Podcast Source: Bonnie Blockchain
Original Title: How to Invest to Turn Your Life Around? The Only Investment Rule I Learned at Morgan Stanley! Jeff Park [Bonnie Blockchain]
Air Date: July 24, 2025
Key Takeaways
Traditional investment allocation is dead! Jeff Park, portfolio manager at Bitwise Asset Management, reveals for the first time in the Chinese-speaking world: The 60% stocks / 40% bonds portfolio is an outdated script!
The stock market has long become a casino, bonds have lost their safe-haven function, and young people are no longer willing to participate in the broken game of the old financial system. As an investment expert who once broke through at Morgan Stanley, he shattered institutional constraints with one ironclad rule and rebuilt his investment logic. Jeff Park proposes a radical investment theory, designing a new survival framework for this uncertain era.
Highlights Summary
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"Resistance assets" can hedge 100% of compliant assets (those reliant on brokers and leverage). These resistance assets are hard to obtain—they're not something you can easily buy on the stock market—have non-fungible characteristics, and cannot be leveraged.
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Scarcity itself is value. In a world full of financial repression, we need to seek assets that aren't artificially manufactured, which is why Bitcoin is so important today.
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If you truly want diversification from the traditional financial system, then assets that don't rely on the system and are fully under your control are the ones with real value. This "off-system" quality is the most important source of value for these assets.
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The key to value is that it must be a scarce physical asset that cannot be easily created; these assets also need non-fungible traits, meaning they can't be easily copied or standardized; another critical factor is that they must possess some degree of censorship resistance—that is, they do not depend on the traditional financial system.
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If you really want diversification from the traditional financial system, then assets independent of the system and fully controlled by you are truly valuable. This "off-system" characteristic is the most important source of value for these assets.
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People often confuse the relationship between value and price, but the difference lies in this: price reflects someone's willingness to pay for something, while value is the inherent worth of the thing itself—which you usually don't know until you experience it.
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Young people have already realized the traditional financial system is somewhat rigged, and their trust in the stock market is generally low.
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Investing in Bitcoin isn’t always a bet on its price going up—sometimes it’s actually a bet on fiat currency losing value.
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Our culture now increasingly simplifies things into either “right” or “wrong,” “left” or “right,” leaving almost no room for nuance. But in reality, the world is full of subtleties, and options trading trains you to focus on the distribution of possible outcomes, enabling a more comprehensive perspective.
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The altcoin market is clearly less active than before. If you’re seeking high-risk exposure, trying Bitcoin options might achieve similar effects instead of buying memes.
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If you're bullish on Bitcoin, investing via options is a highly worthwhile direction, especially suitable for those with a long-term investment horizon.
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I learned many things at Morgan Stanley—the first rule was “don’t make mistakes,” and the second rule was “always remember the first rule.” These lessons apply well to the cryptocurrency space too.
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RWA mainly has two development directions. The first is tokenizing existing financial assets. The second is tokenizing assets that have never been traded or securitized before.
The Traditional 60/40 Portfolio Is Obsolete & Radical Investment Theory
David:
Today we have Jeff Park, Alpha Strategies lead at Bitwise Asset Management and a seasoned portfolio manager. Jeff, welcome! We’re excited to hear your thoughts on Bitcoin and the crypto market.
Bonnie:
Jeff is very popular on Twitter, especially his posts about “radical portfolios” sparking wide discussion. Jeff, can you explain what a radical portfolio is?
Jeff:
That’s a great question. I grew up studying traditional economics and finance—it shaped my entire life. When I entered the workforce, the global financial crisis hit, and I found that the theories I’d learned couldn’t explain reality. After the crisis, we entered a prolonged era of “financial repression” (where governments intervene via policy to suppress interest rates and restrict capital flows)—something absent from textbooks.
“Radical portfolio” is essentially my personal journey—a redefinition of how a new generation should allocate assets. The traditional 60/40 portfolio—60% stocks, 40% bonds—is considered the classic balanced strategy. But in reality, the correlation between stocks and bonds is higher than imagined, so this combination doesn’t truly achieve diversified risk management. The core of the radical portfolio is to fundamentally rethink what true diversification means and redefine the sources and distributions of risk.
Bonnie:
So, what does this new asset allocation look like in your theory?
Jeff:
Yes, we must first understand why the traditional 60/40 model fails. When you dig deeper, you realize that since the global financial crisis, most securities and asset price movements have actually been driven by government intervention and cross-border capital flows.
The global monetary system is undergoing massive fiscal spending, distorting concepts like GDP. For example, GDP includes government expenditure—but does that really count as economic growth? This distortion has turned bonds from safe-haven assets into risk assets.
Once people recognize this, they see that the so-called 60/40 portfolio is effectively 100% of one single asset. What exactly is that 100%? I believe it’s 100% “compliant assets”—assets traded in our highly financialized world, dependent on brokers and leverage.
This global arbitrage system is precisely the foundation of traditional finance. So, how do we hedge against this 100% exposure to compliant assets? That’s where I introduce the concept of “resistance assets.” These are hard to access—not something you can easily buy on the stock market—non-fungible, and cannot be leveraged.
Take gold, for instance—but I mean physical gold, not GLD ETFs. Physical gold represents a decentralized way to detach yourself from the traditional financial system. Bitcoin is also a resistance asset, offering another way to express views on this asset class. Additionally, high-end art and unique artworks—things that can’t be replicated—truly possess scarcity and value.
Traditional stocks and bonds are less valuable because they can be infinitely printed. In contrast, scarce collectibles like Pokémon cards—though it sounds like a joke—retain value for some people. Luxury handbags, like Birkin bags, gain value due to scarcity and can even outperform some traditional assets in terms of preservation.
David:
It sounds like an alternative portfolio.
Jeff:
You could see it that way, but these alternative assets don’t fit traditional investment frameworks. Few would consider buying Pokémon cards, handbags, or art as portfolio diversification because they can’t be traded as easily as ETFs. You also can’t easily acquire scarce resources like biotech or legal intellectual property.
Their value comes from scarcity, and scarcity itself is value. My point is, in a world of financial repression, our generation must open our eyes and seek assets not artificially created. This is why Bitcoin is so crucial today.
If I recall correctly, there’s an extremely rare Japanese Pokémon card issued for Peter’s birthday. It’s exceptionally scarce, especially in mint condition, and can be worth nearly a million dollars.
Alternative Assets Are Outside the System
David:
It sounds ironic, but finding value actually has a methodology. For example, the same method you use to evaluate a Pokémon card could apply to evaluating an altcoin or a piece of art, right? Can you share your thought process?
Jeff:
The key is that it must be a scarce physical asset that cannot be easily produced. Even better if the supply naturally diminishes over time, further enhancing scarcity. For example, the value of Pikachu Pokémon cards isn’t due to quantity, but because many were damaged or lost during use—making surviving mint-condition cards more valuable.
Similar examples include fine wine. People don’t just collect wine—it degrades over time. If properly preserved, its value may grow exponentially. This shows scarcity is the core determinant of value.
Also, these assets must possess non-fungible qualities—they shouldn’t be easily replicable or standardized. In contrast, stocks and bonds derive much of their value from credit systems, and their volatility is often artificially controlled. The assets we seek should inherently possess high volatility and performance potential, not volatility manufactured by the financial system.
David:
Do you use any specific model to decide how to allocate funds?
Jeff:
This is more about personal preference. I enjoy collecting unique art—for example, I’m a big fan of Daniel Arsham’s work. His art blends street culture with high art and is widely admired. His pieces appear in major galleries. Such artworks not only diversify a portfolio but also offer long-term appreciation.
Another key factor is these assets must have some censorship resistance—they shouldn’t depend on the traditional financial system. In stock and bond markets, your assets are typically traded through brokers—you’re not the direct holder. Even if you own Microsoft stock, it’s usually registered under a custodian, not directly in your name.
Even when you “own” Microsoft shares, they’re usually held in a nominee name, not yours. Therefore, actual ownership is crucial. This is why the distinction between physical gold and GLD ETFs matters. If you truly want diversification from the traditional financial system, only assets independent of the system and fully under your control are valuable. This “off-system” trait is their most important value source.
Many People Confuse Value With Price
Bonnie:
I’d like to ask you—what is value? How is value created? Yesterday, Peter Schiff sat here and said: “You Bitcoin fans are just trading ‘nothing’—you’re buying literally nothing.” How would you respond?
Jeff:
I’d reply with a famous saying I find insightful: “Nowadays, people seem to know the price of everything, but the value of nothing.”
We live in an age of information abundance—we see real-time transaction data and opportunities from high-frequency trading. These numbers may appear to reflect value, but in reality, they merely represent transactional behavior at a given moment, not intrinsic value.
Truly valuable things are rarely traded frequently. Some items are meant to be held long-term, not flipped quickly. For example, many billionaires invest in sports clubs or franchises—assets rarely traded on public markets. These are one-off large transactions, sometimes passed down generations, genuinely creating and transferring value.
Therefore, I believe people often confuse value and price. The difference is: price reflects someone’s willingness to pay, while value is the inherent worth of something—which you usually don’t know until you experience it.
Young People Don’t Want to Play the Old System’s Financial Game
Bonnie:
Doesn’t this require consensus? For example, most people agreeing something is worth $2,000?
Jeff:
Maybe everyone is wrong—its value largely depends on personal preference. That’s why older people prefer gold while younger ones lean toward Bitcoin. Ultimately, it’s a matter of individual taste. But another reason I favor Bitcoin and other resistance assets is that young people already sense the traditional financial system is manipulated, and their trust in the stock market is generally low.
To be honest, I think our financial system hasn’t done a good job creating fair, healthy markets. For example, zero-day options now account for over 50% of S&P 500 and Nasdaq options volume.
Zero-day options are essentially lottery-like financial instruments. More concerning, this hyper-financialization happens with regulators’ tacit approval—making the market look increasingly like a casino.
When young people see this, their reaction is understandable: “I don’t want to play this game—I don’t even understand how it works. But I’ll buy what I like and believe in, because at least it holds value for me, and other young people will recognize that value too.”
I think this is how value is created—because we begin to truly appreciate these things.
The Value of Gold
David:
Let’s discuss your overall view on these assets. You mentioned gold earlier—let’s compare gold and Bitcoin. Yesterday I read an article where Goldman Sachs analysts predicted gold could rise to $4,000. They argue gold is a better hedge than Bitcoin and expect it to reach $4,000 in the medium term.
Gold’s supply is extremely limited—most has already been mined. Bitcoin also has a capped supply by design. I think this “limited supply” feature reassures investors worried about runaway inflation.
Additionally, the article highlighted geopolitical factors behind gold. Since 2020, many investors have flocked to gold partly because the dollar has been “weaponized” and confidence in U.S. Treasuries has declined. Previously, Treasuries and the dollar were go-to safe havens, but shaken confidence has shifted demand to gold. That’s one perspective.
What do you think of what I just said—and Goldman’s forecast?
Jeff:
I believe gold’s value primarily stems from its long-standing recognition throughout human history. This circles back to your earlier question—who decides what has value? Gold is undoubtedly one of the longest-recognized assets.
For example, I received gold as a wedding gift; later, when I had children, my family gave gold again. These traditions exist because gold is seen as “hard money”—a way to step outside the fiat system when needed. Especially in extreme scenarios, gold’s portability makes it an excellent asset protection tool.
From this angle, gold’s psychological value is real. Geopolitical factors also matter. After the 1971 collapse of Bretton Woods, although not long ago historically, for a generation, the memory of gold as a capital base remains strong. Many still yearn for an economy backed by real assets rather than purely national credit.
If the world ever reconsiders price systems like the gold standard, gold could regain a central role. Indeed, many governments and central banks are currently increasing gold holdings, viewing it as a hedge supporting potential new international orders. From this perspective, the trend is entirely rational.
Comparing Gold and Bitcoin
David:
Compared to Bitcoin, gold is a safer hedge. Bitcoin is more volatile, prone to drawdowns, and highly correlated with tech stocks. Both perform well when investor risk appetite is high, which may explain Bitcoin’s high-risk profile. What do you think of these points?
Jeff:
Many view volatility as negative, but younger people are more accepting of it. It’s generational. They understand that without embracing some volatility, wealth growth is unlikely—the opportunity cost is too high. Still, volatility is just part of the investment journey—what investors ultimately care about is final returns.
If you believe Bitcoin will appreciate long-term, volatility isn’t scary. Instead, I’m more concerned about Bitcoin’s shortcomings compared to gold—like self-custody. Most people aren’t good at managing their own assets. They’d rather delegate responsibility to banks or custodians, fearing risks. That’s normal human nature. Bitcoin completely flips this model.
To truly own Bitcoin, you must self-custody—meaning you accept the risk of losing everything if you make a mistake. Many can’t handle that pressure. Gold has similar risks, but losing gold isn’t as extreme as forgetting a private key or having it stolen. After all, gold is physical—it exists in the real world.
So, when comparing gold and Bitcoin, I’m less worried about volatility and more focused on self-custody. Many still prefer tangible, touchable physical assets—they feel more reliable. Bitcoin, being digital, feels abstract, which is why some still doubt its value.
Bonnie:
What if we let banks manage Bitcoin? Wouldn’t that simplify things? Then people wouldn’t have to worry anymore, right?
Jeff:
Yes, I think that’s an interesting direction. We need to explore integrating Bitcoin into existing business models, reducing extreme risks—like using insurance—while preserving Bitcoin’s sovereignty. Because once Bitcoin enters custody models, ownership no longer belongs to you—it’s back to the old financial system. Then banks and exchanges may re-lend and re-pledge, solving nothing. So we need methods allowing users to feel safe and convenient using Bitcoin while retaining ownership. I think this is a key area for future breakthroughs.
Bonnie:
Do you think solutions exist now? How far are we from them?
Jeff:
I think the rapid rise of ETFs shows investors can gain Bitcoin price exposure without custody worries. Thus, ETFs and direct Bitcoin holding can coexist. Many still need financialized versions of Bitcoin because they integrate well into portfolio management—usable for margin trading and lending. Directly lending Bitcoin carries counterparty risk, but lending Bitcoin ETFs doesn’t. So traditional finance features do have advantages.
Still, that doesn’t mean investors shouldn’t store some Bitcoin in cold storage. Cold storage is offline and more secure. I believe everyone should try both approaches to truly understand their pros, cons, and use cases.
Bitcoin ETF Outlook for 2026
David:
Recently, Bitwise Asset Management released a report predicting massive inflows into BitcoinETFs, possibly reaching $300 billion by 2026, with $120 billion expected by year-end—a huge increase from last year. Why do you expect such significant growth in Bitcoin ETFs over the next year?
Jeff:
This ties to your earlier point. Bitcoin’s risk profile was strongly correlated with risk assets, but that correlation is weakening. We’re seeing Bitcoin’s price action gradually decouple from stocks. People are realizing Bitcoin can perform well not just in bullish sentiment, but also in risk-off environments.
I call this “positive Bitcoin” and “negative Bitcoin.” “Rho” is an options term describing how an asset’s value changes with interest rates. Usually, rising rates create tougher market conditions. In such risk-off environments, Bitcoin may be seen as a store of value. Historically, Bitcoin acted more like a risk asset—when rates fell, it was the fastest inflation hedge. The key is whether Bitcoin can exhibit both traits at times. Long-term, Bitcoin’s price behavior has shown it can be both “positive” and “negative” across different market conditions. This unique duality is precisely Bitcoin’s value. And Bitcoin ETFs allow investors to enter this market more systematically. Financial advisors are increasingly recognizing Bitcoin is no longer controversial but a legitimate asset class. This is especially relevant amid U.S. credit downgrades and growing fiscal concerns.
David:
I may not have been clear earlier. It’s not just ETFs driving inflows—total Bitcoin inflows are expected to reach $400 billion. But that’s my next question. Can you briefly break down the proportions among ETFs, spot, andfutures within that $400 billion?
Jeff:
I believe ETFs will become globally significant. Note that many countries still lack Bitcoin ETFs—like South Korea. So ETFs have vast global growth potential.
The appeal of ETFs is that many investors don’t want to bear Bitcoin self-custody risks—and ETFs solve that. Meanwhile, those wanting direct Bitcoin ownership can continue doing so, aligning with Bitcoin’s original ethos. But most investors care about optimal return strategies. With ETFs, investors can use more financial tools—like basis trades. Simply put, you hold spot Bitcoin while shorting Bitcoin futures to profit from the spread. This is easier in traditional finance via prime brokerage cross-margining. In current crypto, capital efficiency remains a challenge. So from a trading standpoint, ETFs currently have an edge over direct spot holdings.
Is Bitcoin Breaking $100K an Extreme Event?
David:
If we input Bitcoin’s pre-2013 price movements into a model and assume Bitcoin reached $100,000 in 2013, would that be athree-sigma event?
(TechFlow note: A “three-sigma event” is a statistical concept measuring how rare or abnormal an event is. Here, “three-sigma event” means Bitcoin hitting $100,000 would be extremely rare, far beyond typical price fluctuations.)
Jeff:
That would’ve been a 15-sigma event (almost “impossible”)—and it already happened. Many might say achieving this requires immense time, effort, and focus. But we’re still on this journey—we still don’t know Bitcoin’s price ceiling. Still, I often tell people, investing in Bitcoin isn’t always betting on its price rising—sometimes it’s betting onfiat currency losing value. This may sound counterintuitive, but Bitcoin’s value growth is largely due to ongoing fiat depreciation. I believe since the global financial crisis, fiat has depreciated faster than most expected.
Why Altcoins Are No Longer Popular?
Bonnie:
About Bitcoin, most people are familiar. But if I replace Bitcoin with altcoins, does this model still work?
Jeff:
I personally think we’re now in a “Bitcoin or bust” era. Bitcoin’s popularity is sky-high, while altcoins are still searching for identity. However, I believe as market structures mature and financial use cases clarify, altcoins may find value beyond hype and meme trading.
Currently, most buy altcoins for their leveraged volatility. For example, if Bitcoin rises 5%, people expect altcoins to jump 15%, so they buy altcoins. But over the past nine months—or longer—we’ve seen this correlation completely break. Now Bitcoin can rise while altcoins fall. In other words, altcoins are no longer leveraged bets on Bitcoin.
Part of this is due to ETFs. Once Bitcoin ETFs were approved, starting December last year, investors could trade ETF options directly. If you want leveraged Bitcoin exposure, trading Bitcoin call options is more convenient.
David:
The altcoin market is clearly less active than before. I guess if I want high-risk exposure, instead of buying memes, I might as well try Bitcoin options—they can achieve similar effects.
Jeff:
Exactly. Bitcoin options offer the same high-risk experience with leveraged exposure—and are safer, as you don’t have to navigate complex relationships between Bitcoin and other altcoins, like Bitcoin vs. Helium or Solana. So Bitcoin options are indeed a solid choice. Also, some Bitcoin-related companies, like MicroStrategy, have stock volatility exceeding Bitcoin itself. I believe the rise of firms like MicroStrategy and Meta Planet is drawing trading volume away from altcoins. Now, retail investors prefer speculating via these companies and securities—they offer clearer underlying risk while delivering desired Bitcoin exposure.
Altcoin Treasury Companies vs. Bitcoin Treasury Companies
Bonnie:
You know, some companies are now trying to mimic Solana and Ethereum’s treasury strategies. Do you think this approach works?
Jeff:
I’m eager to see if it works. Personally, I’m optimistic—it might meet certain market needs. I’d say Bitcoin succeeded because people believe it has value, right? So you can borrow against Bitcoin, as others assign it credit value.
That’s why this strategy works in credit markets. As long as you hold enough Bitcoin, lenders see it as valuable and reclaimable collateral.
First, you must believe the collateral asset has value—and Bitcoin has proven successful here. You might argue no other crypto asset has achieved this yet—like Ethereum or Solana. Some may disagree, others support it.
It’s a debatable topic. I’d love to see how the market prices these assets in the future. But I can explain why treasury strategies work. Beyond credit collateral, another reason is that if the underlying asset is volatile, the strategy also works. The leverage from volatility can create more treasury value. Ethereum and Solana are more volatile than Bitcoin—giving them an advantage.
Also, Bitcoin is currently a relatively static, passive asset. People usually just store it in cold wallets—like stuffing cash under a mattress. It generates no yield and can’t be staked. But Ethereum is different. Everyone knows you can earn extra rewards by participating in network security via proof-of-stake. Re-staking, for example, has become a hot topic. There are other ways to generate yield from Ethereum beyond cold storage. While ETFs can’t do this yet, operating companies might.
Thus, I believe these assets may become more productive within corporate treasuries, unlike Bitcoin, which doesn’t need such mechanisms. Combined with volatility, these factors could give proof-of-stake tokens (like Ethereum) a competitive edge over proof-of-work tokens (like Bitcoin).
Exotic Options Trader
David:
You previously worked as a derivatives trader at Morgan Stanley. What products did you mainly trade? I’d like to see how that experience connects to your current work.
Jeff:
My career began at Morgan Stanley, focusing on exotic options within equity derivatives. These instruments are so complex that traditional pricing models like Black-Scholes can’t accurately price them. Black-Scholes is relatively deterministic, but exotic options require more sophisticated handling.
For certain exotic options, you need stochastic models—dependent on asset price paths and multiple local volatility inputs. These include hybrid options, barrier options, and knock-out options. You may not know these terms, but they’re among the most complex financial engineering products designed for various hedging or speculative needs.
As an exotic options trader, my biggest fear was models failing to capture extreme events. Extreme events are hard to predict—even with stochastic volatility models, key correlations between parameters might not be fully reflected. For example, rising spot prices usually affect volatility; falling spot prices often increase volatility. You must incorporate these correlations and path dependencies into models, but these factors can become highly unstable.
Perhaps because of this experience, I became interested in Bitcoin. My job was essentially pricing near-impossible events—like tail options. The core of exotic options is imagining worst-case scenarios—ones often deemed unpriceable. You must assume tail events (like three-sigma events) are more likely than most think. When I first encountered Bitcoin, most were skeptical—“This looks weird, maybe interesting, but probably worthless and will go to zero.” But I instinctively wondered, what if it doesn’t go to zero? If it doesn’t go to zero, it could become extremely valuable. This probability calculation challenges many, as outcomes are binary—zero or extremely high—with very low odds.
David:
When did you first get into Bitcoin?
Jeff:
I first heard about Bitcoin in 2010, on the trading floor. I bought my first three Bitcoins then.
Options Trading Is a Crucial Skill
David:
What advice do you have for retail investors watching this? For example, some feel they can tryoptions trading and are interested in entering this market. What guidance would you give beginners?
Jeff:
I’d tell every beginner, at your stage, learningoptions tradingis a crucial skill. I say this because options trading isn’t just an investment method—it’s a mental model. It teaches you to view the world probabilistically, which is incredibly helpful. Our culture increasingly simplifies things into “right” or “wrong,” “left” or “right,” leaving little room for nuance. But the world is nuanced, and options trading trains you to focus on outcome distributions, enabling a more comprehensive view.
Options trading gives retail investors a big advantage—massive leverage that institutions struggle to access. To me, options trading is the only area where retail investors can outperform institutions. The reason is simple: institutions need large-scale operations, and size impacts market prices. But retail investors are different—you can buy small option contracts without affecting prices or prompting others to adjust strategies based on your position.
I’ve always said retail investors struggle to beat institutions in many areas. The rules aren’t friendly—like not understanding order flow or seeing the centralized limit order book. But options trading is an exception—here, retail’s small size becomes an advantage. So I think everyone should spend time learning options trading.
Also, Bitcoin is one of the most leptokurtic assets in the world. Leptokurtosis means its price movements are highly concentrated and extreme. If you’re bullish on Bitcoin, I believe investing via options is a highly worthwhile direction, especially for those with long-term investment horizons.
Assets That “Convert Time”
Bonnie:
Going back to what you mentioned on Twitter—you said some assets can “convert time.” What does that mean?
Jeff:
Great question. I believe time is a form of energy, and this energy can be converted into value. In a way, Bitcoin embodies this concept through Proof of Work. Simply put, mining Bitcoin requires massive time and effort, rewarded with block rewards. It’s like a battery storing effort—you invest time and energy, and the system rewards you with value.
The logic is that time and energy are scarce resources, and scarcity itself creates value. I think this concept applies elsewhere—like human capital. Human capital is also scarce, and when used wisely, it can generate substantial value.
I often use professional gambling as an example. Not slot machines—pure luck—but professional gambling, where skill generates positive returns.
Take poker. If you’re a skilled player, you typically achieve positive expected value (EV). This means your time and effort have value—this income is unrelated to stock markets or interest rate policies. It relies entirely on your human capital and skills. Sports betting is another example. Sports betting is considered one of the most complex markets because informational edges (like deep research on game outcomes) help smart bettors win. Some professional sports bettors even outperform bookmakers. In fact, bookmakers rely on top bettors to help balance markets. If you’re a pro sports bettor, this income comes from effort and skill. I believe earning income through time and effort should be a vital part of your investment portfolio.
Asset Tokenization
Bonnie:
You mentioned art and cards earlier. If these could be traded via blockchain, wouldn’t that be more convenient? Does this mean you believe in RWA (real-world assets)? But some disagree—they say art should hang on walls, gold should be tangible. What’s your take?
Jeff:
I think RWA is a compelling trend, interpreted differently by different people. To me, RWA has two main directions.
The first is tokenizing existing financial assets—like traditionally illiquid assets such as private equity or private credit. Tokenization makes them easier to trade. Assets once stuck in primary markets can become more flexible—tokenization is key. This is a classic RWA application.
The second direction is more interesting—tokenizing assets never traded or securitized before. Like trading cards or sneakers—high-volume items not designed for trading. If tokenization unlocks new liquidity for these, it would be meaningful.
For example, companies like StockX specialize in sneaker trading, but logistics—shipping, storage, insurance—are costly, eventually passed to consumers. With on-chain tokenization, imagine a new business model: digital certificates enable ownership transfer without moving physical assets. Transaction efficiency improves dramatically while cutting costs.
Take watches—a massive, valuable market rife with fraud. Authenticity assurance is critical. With tokenization, you could create a market where buyers trade watch ownership without moving the physical item. If the end buyer invests or trades rather than wears it, this model is highly efficient. Yet, physical assets remain redeemable—the tangible aspect preserves value.
David:
I’d like to play devil’s advocate. Years ago, people tried tokenizing physical assets like Rolex watches. But most of these digital assets went to zero, while the actual Rolex remained worth $25,000. So do we really need digitization? Isn’t there no need to digitize existing physical assets? That’s the opposing view. What do you say? Looking at past cases, many digital assets went to zero, right? While real physical assets retained value?
Jeff:
I think you’re implying these digital assets didn’t grant ownership of the physical asset, correct? They were more like metaverse virtual assets. If so, yes, they were metaverse assets. What I’m discussing is different—using NFTs to simplify physical asset trading. This model hasn’t succeeded much in crypto yet, but I believe it’s worth exploring at the right time. Of course, costs must be considered.
Lessons Learned at Morgan Stanley
David:
What lessons did you learn from your Morgan Stanley experience? How do they apply to your trading today?
Jeff:
I learned many things at Morgan Stanley—some rules left a deep impression. For example, the first rule was “don’t make mistakes,” and the second rule was “always remember the first rule.” These lessons apply well to crypto. The crypto market is experimental and speculative—many opportunities look attractive but carry high risks. So I approach new opportunities more cautiously, as external risks abound—even seemingly reliable protocols can fail. These Morgan Stanley rules act like “devils” constantly reminding me to pause and think before deciding. That’s why I consider myself somewhat of a Bitcoin extremist.
Bonnie:
So you’ve gone through a phase of buying altcoins, right?
Jeff:
Of course, I’ve bought altcoins. Interestingly, when you engage in these trades, you realize crypto code is “alive”—it evolves with protocol upgrades and tokenomics adjustments. Sometimes you need to swap one token for another—if you miss the window, you lose the opportunity. Crypto lacks agent services to remind you—no letters saying “complete this action by deadline.” They usually just tweet on social media—and if you miss it, you’re out of luck.
That’s one reason many investors face challenges in crypto. The space demands constant attention, unlike traditional finance with clear notification systems. Sometimes, two years later, you remember you forgot to stake a token—and regret sets in.
The crypto space changes fast—many once-major projects have risen and fallen. This taught me crypto investing requires not just patience but continuous monitoring of market shifts.
What Would You Gift Your Child at Their Wedding?
David:
I have one more question. Let’s try making this more fun. I’m not sure I can, but let me try—this is stressful. You mentioned receiving gold at your wedding. If your child gets married, what would you gift them?
Jeff:
Following family tradition, I’d pass down gold. But I’d also like to bring Bitcoin into this conversation. On this note, I recall something funny. My son is five—he’s often around me. He’s overheard my wife and me talking about Bitcoin. Sometimes at dinner, he asks, “Dad, how much is Bitcoin worth now?” But he doesn’t grasp big numbers yet—he doesn’t understand concepts like ninety or a hundred thousand.
David:
You could explain it using Pokémon cards—tell him how many cards that amount could buy.
Jeff:
Exactly, that’s a good idea. I haven’t done that though. But I have a funny story. Recently, my son traded Pokémon cards with friends—he swapped authentic cards for fake ones you can buy on Amazon. These fakes are made in China—fake, but shiny and golden, even looking more valuable, right? So he proudly showed them to me, saying, “Dad, look how beautiful these golden cards are!”
I didn’t want to tell him they’re fake, so I used Bitcoin to explain. I told him blue cards are the real original ones—like Bitcoin, scarce and perfect collateral. He knows “perfect collateral” well—I’ve used that phrase to describe Bitcoin before. So now he understands—the blue cards are most valuable. He said, “This is perfect collateral—I won’t trade it away anymore.”
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