Consider holding Bitcoin (BTC) as a core asset, as a catch-up trade is expected relative to Gold and the Nasdaq. For foundational blockchain exposure, invest in the established supercomputing network leaders, Ethereum (ETH) and Solana (SOL). To gain exposure to decentralized exchanges, consider Aerodrome (AERO) on the Base network and both Jupiter (JUP) and Raydium (RAY) on Solana. For a high-risk, high-reward play, a small speculative bet on Zcash (ZEC) offers significant upside if it becomes the dominant private digital cash network. Finally, Ethena (ENA) is a high-conviction investment, identified as the clear leader in the algorithmic stablecoins category.

Investment Thesis: Investing in Networks

The core investment thesis for 2026 is to move away from speculative gambling and focus on investing in protocols that have or can achieve "network effects." A network effect occurs when each new user adds exponential value to the network, making it stronger and harder for competitors to challenge.

• The Market Has Matured: The crypto market is no longer a "retail casino." Institutions are now involved, and they invest in protocols with strong network potential, similar to how they invested in tech networks like Amazon, Google, and Facebook.
• Winner-Take-All Dynamics: Networks tend to produce a dominant #1 player and sometimes a much smaller, niche #2 player. Most other competitors fail.
• The Investment Framework:
  1. Identify a sector where network effects are possible (e.g., trading, money, computing).
  2. Determine if a dominant #1 and #2 network already exist.
     • If YES, invest in the established #1 and potentially the #2.
     • If NO, the space is still open. Place several smaller bets on the projects you believe have the potential to become the #1 or #2 network.
  3. Be disciplined. If a project has been around for a long time and has failed to gain network effects, it may be time to cut losses and reallocate capital to projects with a clearer path to success.

Bitcoin (BTC)

• Bitcoin is described as the established, dominant network for "store of value."
• It has already achieved strong network effects, meaning the more people use and accept it, the more valuable it becomes.
• The speaker believes there will likely not be a competitor or a "#2" in this category.
• A "catch-up trade" is expected. Bitcoin's price has recently de-correlated from Gold and the Nasdaq, and the speaker believes this correlation will be restored, leading to a run-up in Bitcoin's price.
• Macroeconomic factors like the end of Quantitative Tightening (QT), potential interest rate cuts, and possible stimulus checks are seen as major tailwinds that will push capital into assets like Bitcoin.

Takeaways

• High Conviction Hold: Bitcoin should be a core holding in a crypto portfolio due to its established and unmatched network effect as a store of value.
• Action: The speaker suggests investors should "double down on Bitcoin."

Supercomputing Networks (Layer 1s)

This category refers to the base-layer blockchains that applications are built on. The speaker identifies two established networks and one speculative bet.

Ethereum (ETH)

• ETH is described as a dominant "supercomputing network" that has already achieved network effects.
• Its strength lies in being a high-security Layer 1 that serves as a foundation for numerous Layer 2 solutions.

Solana (SOL)

• SOL is also described as a dominant "supercomputing network" with established network effects.
• Its strength is in its monolithic architecture, where all activity happens on the main chain, offering a different value proposition than Ethereum.

Sui (SUI)

• SUI is mentioned as a smaller, speculative bet.
• The investment thesis is that it could potentially capture the "distant number two spot" in the Layer 1 race, operating in a niche behind the giants, ETH and SOL.

Takeaways

• Invest in the Leaders: The primary strategy is to invest in the established network leaders, ETH and SOL, as they have already proven their network effects.
• Speculative Bet: For investors looking for higher risk/reward, a smaller allocation to a project like SUI could be considered as a bet on it becoming a niche #2 player.

Trading Networks (Exchanges)

Trading platforms are highlighted as a "killer application" because they are networks built on top of other blockchain networks. The more traders a platform has, the deeper its liquidity, which in turn attracts more traders.

Centralized Exchanges

• Binance (BNB): Identified as the dominant, #1 network in centralized crypto trading.
• Mantle (MNT): Positioned as a potential "distant number two" to Binance. The speaker mentions this in the context of the Bybit exchange.

Takeaways

• The speaker is holding both BNB (as the #1) and MNT (as the potential #2) to capture the centralized exchange market.

Decentralized Perpetual Exchanges

This sector is seen as having no clear winner yet, meaning the #1 and #2 spots are still open for the taking.

• Hyperliquid: Described as being in the lead to achieve network effects but has not fully secured its position yet.
• Drift (DRIFT) & Aster: Mentioned as other potential contenders that could become the #2 player or challenge for the top spot.
• Lighter: A future project to watch when it launches. The speaker may consider a small bet if the valuation is right.

Takeaways

• Place Multiple Small Bets: Since there is no dominant network, the strategy is to invest in several promising projects.
• Action: The speaker holds Hyperliquid, Drift, and Aster to cover multiple potential winners in this emerging sector.

Decentralized Exchanges (DEXs)

• Aerodrome Finance (AERO): The speaker believes Base will be the biggest Layer 2 chain on Ethereum and that AERO has already secured network effects as the leading DEX on Base.
• Jupiter (JUP) & Raydium (RAY): On the Solana network, both JUP and RAY are identified as having network effects. The speaker believes one will become the #1 DEX on Solana and the other will be the #2.

Takeaways

• Bet on Chain-Specific Leaders: The strategy is to identify the leading DEX on a promising blockchain.
• Action: The speaker is betting on AERO for exposure to the Base ecosystem and is betting on both JUP and RAY to capture the DEX market on Solana.

Peer-to-Peer Money Networks

This category is for cryptocurrencies designed to be used as digital cash. The speaker believes no protocol has achieved true network effects here yet, making it a field for early, high-potential bets.

Zcash (ZEC)

• ZEC is the speaker's primary bet in this category.
• Bullish Factors:
  • It is described as fast, cheap, and built using Bitcoin's technology.
  • Its key feature is being "compliantly private," meaning user balances aren't public, but it's designed to not be shut down by regulators.
• Potential: The speaker notes that since it has not achieved network effects yet, it's similar to investing in Bitcoin in its early days. If it succeeds, it could offer returns of 100x to 1,000x.

Takeaways

• High-Risk, High-Reward Bet: ZEC is considered a small, speculative bet on the future of private digital cash. Its success is not guaranteed, but the potential upside is enormous.

Kaspa (KAS)

• The speaker mentions being "out of Casper," which is likely a reference to Kaspa (KAS) given the context of Proof-of-Work, speed, and cost.
• The reason for selling is that the project has been around for years but has not managed to achieve network effects or significant traction.

Takeaways

• Cut Losses on Underperformers: This serves as an example of the speaker's thesis. If a token has been available for a while and shows no clear path to network effects, investors should not be emotional and should consider reallocating that capital to more promising projects.

Privacy & Institutional Networks

This is a major narrative, as institutions entering crypto will require privacy for their transactions. This sector does not have a clear network leader yet.

• ZK Sync (ZK): A bet is placed on ZK because it is fast, compliantly private, and is reportedly getting "really big institutional adoption."
• Starknet (STRK): A bet is placed on STRK primarily due to trust in its founder, who was also a co-founder of Zcash.
• Canton Network: This is another bet due to its unique design allowing institutions to launch their own chains, its legal compliance, and its "insane traction" and strong institutional backers.

Takeaways

• Place Multiple Small Bets: Similar to decentralized perpetuals, the privacy sector is still developing. The strategy is to make several small investments in projects with strong technology, teams, and institutional interest.
• Action: The speaker has placed bets on ZK Sync, Starknet, and Canton to gain exposure to this theme.

Other Network Plays

Ethena (ENA)

• ENA is described as the clear #1 in the algorithmic stablecoins category.
• It has already started to achieve network effects: more users lead to more exchange listings, which in turn brings in more users.

Takeaways

• Invest in the Category Leader: Ethena is a bullish pick as it has already established itself as the dominant player in its niche.

Prediction Markets: Kalshi & Polymarket

• Prediction markets are expected to be a huge narrative.
• Kalshi and Polymarket are identified as the two main platforms that will be "battling for network effects" in this space.
• They recently gained legitimacy through a licensing deal with the NHL.
• There is no clear winner yet between the two.

Takeaways

• Bet on Both Contenders: Since the #1 spot is up for grabs, the speaker suggests holding positions in both Kalshi and Polymarket to ensure exposure to the eventual winner of the prediction market space.