The 3 Coins His Multi-Billion Dollar Fund Is Bullish On This Cycle - Tushar Jain | E178

Finance-Focused Summary (Markets, Investing Framework, Crypto Portfolio/Risk)

Market Cycle / Timing Signals

• Tushar’s “turning point” setup:
  • Sentiment bottoms (similar to bull-market “euphoria,” but in reverse).
  • Bad news stops causing sell-offs, and good news stops causing upside bursts.
  • Example: significant crypto hacks recently did not trigger broad sell-offs, suggesting signal stabilization.
• Bottoms are hard to call precisely:
  • Expects chop/apathy rather than a sharp V-reversal.
  • “Peak apathy” and many industry participants leaving implies mainly “true believers” remain.
  • A further drop is still possible on macro shocks (example: US–Iran war escalation causing risk-asset crashes).

Portfolio Construction & Sizing (Crypto)

• Core principle: “Sizing is an art, not a science.”
  • Quantitative models can create false precision.
  • For longer-term investors, sizing purely quantitatively is a trap.
• Recommendation: Be very concentrated in your best ideas
  • “Why do you have money in your 10th best idea?”
• Correlated bets (e.g., Solana vs Hyperliquid) have no universal rule:
  • Use relative win probability.
  • Size based on how much of the thesis “pie” each position targets.
  • Emphasis: probabilistic ownership (own both rather than “maxi” all-in on one).

Entry / Adding During Volatility (Risk Management)

• Rejects trying to time exact bottoms (“magic”).
• Framework: buy-in thirds + DCA + opportunistic tranche
  • 1/3 immediately
  • 1/3 on a defined schedule (DCA over ~1–2 months; timeline flexible)
  • Last 1/3 opportunistically during the DCA window if price drops
    • Example trigger: down 10% → use opportunistic capital
• Psychology / regret minimization:
  • “Imagine yourself 1–2 years ahead and which choice makes you feel dumber.”
  • Delaying for a “better entry” that never arrives creates regret → deploy earlier tranches.

Trading vs. Investing Philosophy

• Actively managed, not actively traded.
• Reason: micro-timing and frequent profit-taking can cause whipsaw
  • Selling into strength, then rebuying higher after no drawdown.
• Claim: timing a cycle is feasible, but fine-grained trading decisions are not.

“Edge” Framework (Decision-Making)

• Invest only where you have edge; otherwise buy the index.
• Four sources of investing edge:
  1. Access / information edge (ability to call others, get early signals)
  2. Analytical edge (understanding business mechanics, cash flows, multiples, risks)
  3. Behavioral / psychological edge (knowing your reaction at bottoms/tops)
  4. Structural edge (fund structure, duration, cheap capital, etc.)
• Identify which edge drives your decision; without an edge source, don’t act.

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Key Crypto Instruments / Themes Mentioned

Solana (SOL)

• Still bullish: “right technical architecture for internet capital markets.”
• Belief: a permissionless open-source chain integrating everything into one platform.
• Spot vs derivatives:
  • Positioned as leader on spot trading.
  • Expects tokenized securities to come to Solana as “rails” for spot transactions.
• Risk/competition discussion:
  • Solana is a “credible neutral” with multiple clients and a robust validator community, but that may come with costs.

Hyperliquid (HYPE)

• Still bullish; included in his probabilistic portfolio.
• Claims:
  • Derivatives volume shifting to Hyperliquid.
  • A lead in derivatives.
• Structural trade-off vs Solana:
  • Limited validator set / more opaque validator code enabling better performance.
  • Users accept reduced transparency if solvency and chain history can be verified.
• Ownership stance: “I still own both in size” (not exclusive).

Zcash (ZEC)

• “Most obvious” in 2026, but as a smaller position due to liquidity and market cap constraints.
• Multicoin reportedly accumulated a “pretty significant” position (as a share of total supply, per transcript).
• Thesis points:
  • Momentum + community use case
  • “Reminds me of early Bitcoin days”
  • “No fundamentals / no cash flow” means valuation isn’t anchored to revenue; upside may be larger because it’s driven by narrative/attention and sentiment.
• Valuation framework for non-revenue assets:
  • Not a multiple-of-earnings approach.
  • Ranks where it could land in the hierarchy:
    • “Is it number 20/15/10/top five?”
  • Targets are relative and macro-dependent (what Zcash “is worth” varies if Bitcoin is at $80K vs $200K).

DeFi / Related Tokens & Platforms

• Athena (DeFi protocol)
  • Positioned in a convergence of leverage / borrow-lend / derivatives funding
  • Lenders deposit USDE
  • Borrowers are derivatives traders seeking leverage and paying funding
• Morpho (mentioned as a convergence partner/category comp)
• Camino (largest/most secure lender on Solana)
• Jupiter (DeFi super app; sponsor/product mention rather than an explicit thesis)

Stablecoins / Payment Rails Mentioned

• USDC
  • Explicitly used in Hyperliquid report assumptions and as collateral context.
• Stablecoins + RWAs referenced conceptually:
  • Support for infrastructure, while distinguishing centralized assets from “cipherpunk” decentralized ideals.

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Key Numbers & Explicit Forecasts (From the Transcript)

Hyperliquid (HYPE) “Report” (Post-Interview Update + Earlier June Report)

• Base case target: HYPE > $319 (≈ “more than 300”)
• Implied growth: ~5x in the next two years (from “here” to >$319)

Assumptions described as “conservative”:

• 35% CAGR in crypto derivatives volume over a 2-year horizon
  • Context: historically ~45% per year compounded from 2020–2025, reduced by haircuts for law-of-large-numbers.
• DEX market share assumption:
  • 32% decentralized exchange share of derivatives in 2 years
• Hyperliquid market share:
  • Held at 30% (called conservative)
  • Argument: open interest share is more reliable than volume share because volume can be gamed
  • Hyperliquid currently: ~59% of open interest vs 30% volume share mentioned
• USDC balances grow roughly with trading volume:
  • Assumes leverage usage ratios remain constant → roughly linear growth across volume → open interest → USDC collateral.

Zcash (ZEC) / “Time to Buy”

• No explicit price target in the main body.
• Uses a ranking approach (top 10 / top 5).
• Timeline framing:
  • “In 2026,” Zcash is described as particularly obvious, with an attention/momentum tailwind.

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Risk and Caution Notes

• Avoid false precision in sizing and valuation; treat numbers as guideposts, then make qualitative decisions.
• Technical analysis:
  • “Not a fan of technical indicators” (compared to “astrology for men”).
  • Belief: real movement is driven mostly by news/actual events.
• Emotions and liquidity:
  • Exact timing is difficult due to liquidity thinning and emotional decision-making.
  • DCA and multi-tranche entries reduce regret and improve psychological survivability.
• Selling discipline:
  • Fund-level stays “fully deployed,” but individual positions may be reduced in euphoria.
  • Only “sell for three reasons”:
    1. Like something else better
    2. Thesis invalidated / something went wrong
    3. Market is overvalued/exuberant and gives too much credit into the future
  • Uses Bitcoin as cash in the fund, selling/rebalancing into BTC, then redeploying when investing.

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Disclosures / Disclaimers

• No formal “not financial advice” line is quoted, but the transcript contains disclosure-like sentiment:
  • The report is a framework; readers should make their own decisions, run their own numbers, and not rely on headlines.
• Sponsor mentions exist (e.g., Bitwise, Cast, Treasure, Athena), but no explicit legal disclaimer text is captured in the subtitles.

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Presenters / Sources Mentioned

• Tushar Jain — Managing Partner & Chief Investment Officer, Multicoin Capital
• Kyle — referenced as Multicoin co-founder/longtime partner (left; not presented as a speaker)
• Kevin — host of When Shift Happens (moderator; not the main interview subject)

Show / backing & sponsors mentioned in transcript:

• Bitwise Asset Management
• Cast
• Treasure
• Athena
• Jupiter
• Variational
• Institutional context references: BlackRock and MicroStrategy