Consider a long position in Ethena (ENA), which is viewed as a top stablecoin play with the potential to become the #2 stablecoin, supported by a half-billion-dollar token buyback fund. Drift Protocol (DRIFT) is presented as a significantly undervalued perpetual DEX, offering a potential catch-up trade due to its diversified revenue streams. For early exposure to the anticipated Bitcoin L2 narrative, look into Hemi (HEMI), a project designed to generate yield on Bitcoin. To position for a potential airdrop, interact with the new privacy-focused perpetual DEX Privy, which currently has no token. Finally, maintain a core holding in Bitcoin (BTC) for inflation protection, or consider Galaxy Digital (GLXY) stock for a traditional equity investment with dual exposure to crypto and AI.

Overall Market Outlook & The Four-Year Cycle

• There is a strong mega bullish sentiment from key figures like Arthur Hayes, driven by the expectation of continued and increasing money printing by central banks globally (Fed, ECB, Bank of Japan).
• Arthur Hayes argues that inflation necessitates owning financial assets, and Bitcoin has been and will continue to be the best tool for capital protection.
• The traditional four-year crypto cycle is being questioned. The consensus is that the cycle is not ending soon.
  • Arthur Hayes believes the cycle will last as long as global liquidity and money printing continue to expand. He points to governments worldwide (US, France, Japan, China) all signaling more fiscal stimulus and money printing, not less.
  • Bitwise notes the industry is more mature and diversified, with many past risks (like exchange failures) now mitigated due to regulatory scrutiny, making a major crash less likely.
• Tom Lee from Fundstrat believes both crypto and equities will do well in Q4. He advises against using margin to prepare for a potential "crypto winter."

Takeaways

• The macro environment of global money printing is seen as the primary driver for crypto asset appreciation. Investors should monitor central bank policies.
• The idea of a predictable four-year cycle peak may be outdated. The current bull market could be longer and more sustained, driven by liquidity rather than just the Bitcoin halving schedule.
• While the outlook is bullish, it's wise to be cautious with leverage. Holding spot assets is seen as a safer strategy than using high margin.

Bitcoin (BTC)

• Arthur Hayes identifies Bitcoin as the single best capital protection tool against inflation over the last 15 years and expects this to continue.
• A major emerging narrative is generating yield on Bitcoin. Wall Street is accumulating Bitcoin and will eventually seek yield on it.
• This demand for yield is expected to fuel a Bitcoin Layer 2 (L2) narrative.

Takeaways

• Holding Bitcoin is viewed as a core strategy to preserve wealth in an inflationary environment.
• Investors should pay close attention to the emerging Bitcoin L2 ecosystem. Projects that enable yield generation on Bitcoin, like Hemi (HEMI), could see significant growth as institutional demand for yield increases.

Hemi (HEMI)

• Hemi is a new Bitcoin L2 that merges the Bitcoin and Ethereum ecosystems.
• It aims to provide yield on Bitcoin, which is currently a major unmet need for large holders.
• The platform allows users to stake their Bitcoin for yield through a simple, two-step process. It offers both low-risk (basis points) and higher-risk (8-10%) yield options.
• The speaker is extremely bullish, stating the Bitcoin L2 narrative hasn't started yet and Hemi could lead the charge when it does. He reminds viewers that he previously recommended buying HEMI which resulted in profits.

Takeaways

• Hemi is presented as a high-potential, early-stage investment to gain exposure to the anticipated Bitcoin L2 trend.
• As institutional players like Wall Street look for ways to make their Bitcoin holdings "productive," platforms like Hemi are positioned to capture massive inflows. This is a key narrative to watch.

Perpetual DEX (Perps) Theme

• Perpetual DEXs (or "Perps") are a major topic of discussion, with intense competition among platforms.
• Arthur Hayes predicts a "Chinification of Perps," where trading fees will be driven down to zero as platforms compete for users. He believes the value will shift away from the trading fees themselves and towards other activities the platforms can generate.

Hyperliquid (HYPE)

• Mentioned as a very profitable and successful perp DEX.
• However, Arthur Hayes expresses concern about its token's value proposition (HYPE) in a future where competitors offer zero-fee trading and better token incentives, potentially eroding Hyperliquid's revenue.
• Bitwise has filed for a Hyperliquid ETF in the US, indicating institutional interest.

Drift Protocol (DRIFT)

• The speaker argues Drift is significantly undervalued compared to competitors like Hyperliquid, suggesting a potential 40x mispricing by the market.
• Drift's key advantage is its diversified ecosystem beyond just perps. It is a full financial system on Solana with borrow/lend, spot margin, and the largest vaults product on the network.
• This diversified revenue model means Drift is prepared for a zero-fee trading environment, as it doesn't rely solely on perp fees.
• The speaker maintains that Drift is the most undervalued DEX on the market and expects a "catch-up" trade where the market reprices it much higher.

Privy (on Codi)

• A newly launched perp DEX with a unique focus on privacy.
• It uses a technology called "garbage circuits" which is claimed to be superior to ZK-proofs for this use case, enabling a fully on-chain DEX where bids, assets, and leverage are completely private. This prevents front-running and liquidations based on public leverage data.
• There is no token yet, but users can trade on the platform now to become eligible for an upcoming airdrop. The team is not selling to VCs, suggesting a community-focused launch.

Takeaways

• The Perp DEX space is highly competitive. Arthur Hayes suggests shorting perp DEX tokens that rely solely on trading fees, like HYPE.
• Drift (DRIFT) is presented as a compelling "catch-up" trade. Its valuation is low compared to peers, and its diversified business model makes it resilient to fee compression.
• For airdrop hunters and those bullish on the privacy narrative, using the Privy DEX now could lead to a future token airdrop. The launch is expected to be a major event.

Ethena (ENA)

• Arthur Hayes is extremely bullish on Ethena, calling it the "best stablecoin narrative."
• He believes Ethena can supplant Circle (USDC) to become the #2 largest stablecoin in the market, behind Tether.
• He predicts the total stablecoin market will grow from ~$300 billion to single-digit trillions, and Ethena is poised to capture a significant share of that growth.
• A key bullish factor is that the protocol has half a billion dollars in cash on its balance sheet ready to be used for token buybacks.

Takeaways

• Arthur Hayes's specific trade recommendation was: Long Ethena (ENA).
• The combination of a massive growth narrative (stablecoin market expansion) and a strong tokenomic driver (large-scale buybacks) makes ENA a top pick for him.

Cardano (ADA)

• Charles Hoskinson admits that Cardano "misstepped on the DeFi side" and is lagging competitors like Solana in metrics like TVL and stablecoin adoption.
• The strategy to catch up involves several key areas:
  • Midnight: A new privacy-focused chain that has already brought in over 100 partnerships and integrations (Brave, Blockchain.com), adding a potential 100 million users to the ecosystem.
  • Bitcoin DeFi: Leveraging Cardano's UTXO model, which is compatible with Bitcoin, to build a DeFi ecosystem for the $2 trillion Bitcoin market.
  • XRP DeFi: Targeting the nearly $100 billion of XRP that currently has no native DeFi ecosystem.
• The Cardano treasury has $1.5 billion available for the community to spend on growing the ecosystem.

Takeaways

• While Cardano (ADA) has underperformed in DeFi, it has a clear strategy for a comeback focused on privacy (Midnight) and tapping into the massive, underserved Bitcoin and XRP ecosystems.
• The project's strong community and massive treasury are significant assets that could fuel a turnaround. This is a potential contrarian play for investors who believe in the new strategy.

Digital Asset Treasury (DATs) & Galaxy Digital (GLXY)

• DATs are companies that hold crypto on their balance sheet, offering investors exposure through traditional equity markets (e.g., MicroStrategy).
• They are seen as a key access point for institutions like sovereign wealth funds that can buy equities immediately while they work on getting approval to buy spot crypto.
• Galaxy Digital (GLXY) is a major player in this space, having recently uplisted to the NASDAQ.
• Galaxy is pivoting its large Bitcoin mining business into an AI compute business, positioning itself as a dual crypto and AI company.
• Galaxy has also tokenized its own stock (GLXY) on the Solana blockchain, demonstrating a commitment to on-chain finance.

Takeaways

• DATs are a major institutional theme. They provide an alternative to ETFs for gaining crypto exposure.
• Galaxy Digital (GLXY) is a specific stock to watch. Its dual exposure to both the institutional crypto trend and the booming AI sector makes it a unique investment vehicle.

Ethereum (ETH) & L2s

• Ethereum is described as a "productive asset" because it can be staked to earn yield, unlike Bitcoin.
• The mission of major players like ConsenSys is to make Ethereum the settlement layer of all economic activity.
• Galaxy's Head of Research believes Ethereum was undervalued for the first half of the year and is well-positioned to benefit from regulatory clarity around DeFi and tokenized real-world assets (RWAs).
• ZK-Sync (ZK) is a leading Ethereum scaling solution.
  • It is a leader in RWA adoption, with $2.3 billion in TVL.
  • A bet on ZK-Sync is framed as a bet on privacy, which is seen as essential for banks and financial institutions to move on-chain.

Takeaways

• Ethereum (ETH) remains a core holding, with its yield-bearing nature being a key differentiator.
• The growth of DeFi and RWAs on Ethereum is a primary long-term catalyst.
• Layer 2 solutions are critical for Ethereum's growth. ZK-Sync is highlighted as a key player, particularly for its focus on privacy and its traction with institutional-grade RWAs.

Other ETF Mentions

• Bitwise confirmed they have active filings in the US for ETFs covering a wide range of altcoins.
• The list includes: Solana (SOL), XRP (XRP), Avalanche (AVAX), Dogecoin (DOGE), Chainlink (LINK), Near Protocol (NEAR), Aptos (APT), and Hyperliquid (HYPE).

Takeaways

• The approval of spot Bitcoin and Ethereum ETFs is just the beginning. There is significant institutional work being done to bring a much wider variety of crypto assets to public markets.
• The assets on this list are likely to see increased attention and potential inflows as these ETF filings progress.