Episode summary
Where Is The Crypto Alpha Hiding This Cycle?
Forward Guidance
· · Guests: Arthur Cheong, Rajiv Patel-O'Connor, Smac
Summary
The panel argued that crypto’s alpha is increasingly coming from selective, fundamental work rather than simple beta exposure, especially in an early and uneven bull market. The host framed the discussion around where crypto AI, privacy, and liquid-versus-venture allocation still offer room for edge, and the guests agreed that the easy money phase is over. One guest said the market now rewards discipline, timing, and a willingness to build positions through volatility rather than chase momentum.
On crypto and AI, the guests were divided but broadly constructive. They pointed to real overlap in areas like privacy-preserving infrastructure, decentralized coordination, agent communication, and financing for GPU-heavy AI buildouts, while also cautioning that some of the most popular narratives may still be force-fit. Another guest argued that crypto’s advantage may lie less in raw efficiency and more in permissionless coordination, privacy, and the possibility that machine-to-machine activity will prefer open networks over centralized APIs.
The discussion also emphasized that dispersion has made both long and short selection more important. One guest said consensus names can still outperform if fundamentals stay strong, citing $HYPE as evidence, while another argued that active managers can now generate real alpha by shorting weak projects and by sizing early, high-conviction positions carefully. On venture, the panel saw continued opportunity in seed and pre-seed, though they also noted that some later-stage assets may remain crowded and increasingly competitive.
Key takeaways
- A guest said crypto funds are now being rewarded for dispersion and stock-picking, with many liquid managers outperforming Bitcoin and ETH year to date.
- One guest argued that crypto AI works best where it exploits permissionlessness, privacy, and coordination rather than trying to beat centralized AI on raw efficiency today.
- The panel highlighted financing for AI infrastructure, including mid-market GPU cluster financing, as a practical crypto-adjacent opportunity set.
- A guest said consensus assets can still work if fundamentals are strong, using $HYPE as the example of a crowded name that kept outperforming.
- The guests said seed and pre-seed still offer the most room for 50x-style outcomes, while growth and late-stage crypto have become more crowded.
Notable quotes
“I think this is probably not a very well-known fact but uh the developer of the largest open-source uh AI agent framework uh Hermes is actually built by uh news now research”
“crypto is especially good at coordination and then kind of like economic incentives”
“I think that's actually very healthy like it's Just because u an asset is consensus um amount of smart money doesn't mean it can't outperform anymore”
How the episode opens
Nothing said on Ford guidance is a recommendation to buy or sell any investments or products. All right, everybody. Super excited today to be joined by some of my favorite allocators in the industry here to talk a bit about where the alpha is in this cautiously optimistic but potentially early bull market that we have going on here.
Um, yeah, why don't we go on the line here? Just feel free to introduce yourself. Um yeah, maybe mention your your style of fund and what you focus on and we'll start with you Arthur.
Yeah. Uh I'm Arthur. I'm the founder and CEO of Defiance Capital. Uh we are crypto liquid funds that's been investing in the space since 2020. Uh classic liquid venture style. We buy the crypto of um the ad that we have a lot of promising potential. Um and yeah, stay in for the ride. Yep.
Hi, I'm Rajie. I'm a GP of Framework Ventures. for SF-based investment firm um that mostly does uh early stage venture and some liquid token investing. — Yeah, I'm smack uh I'm a partner at Compound. We are a thesis driven research ccentric investment firm typically early stage venture um and more recently spending time on uh publics in equities and and tokens as well. So generalist fund based in New York probably a third of the fund is cryptoreated.
Awesome. Um yeah, why don't we get into where the emerging sectors are and what's interesting. Um obviously the first one is AI has obviously been the the you know a lot of excitement there over the last year and starting to see that shift towards excitement in crypto and obviously the the intersection of AI and crypto is there's there's a lot of interest and excitement there.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- crypto alpha
- crypto ai edge
- illiquid token allocation
- ai agents and blockchains
- seed vs growth
Companies and tickers mentioned
- DAS Singapore
Watch the episode
Watch “Where Is The Crypto Alpha Hiding This Cycle?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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