Best Crypto Picks for Your Portfolio: What to Check Before You Invest

No Universal Best Crypto

If you're trying to figure out which crypto to put money in , there is no single answer. Bitcoin, Ethereum, stablecoins, and altcoins all serve different purposes and carry different risks. Some people keep crypto as a small slice of a bigger portfolio. Others go all-in on digital assets. The right call depends on your goals, your risk tolerance, and how much you can afford to lose.

What Crypto Actually Is

A Swissborg explainer describes cryptocurrency as a decentralized digital currency based on cryptography. Cryptography is a mathematical technique that can support secure, private, and trustless transactions without a bank in the middle. The decentralized structure means holders own assets that no government or central bank issues or controls.

Blockchain is the distributed ledger that records crypto transactions. Transactions get grouped into blocks. Once a block fills up, it closes and links to the earlier block, forming a chain. The ledger copies across many computer systems, which makes it hard to alter past records. Companies outside crypto are also exploring blockchain uses.

Bitcoin - The First Big One

Bitcoin launched in 2009 and hit its first million users by 2011. A Colossus profile called it the most valuable startup created since the whitepaper dropped in 2008, with a market cap near $2 trillion.

Bitcoin has a few traits that come up in investment arguments again and again:

Bitcoin traits investors discuss

The fixed supply is central to the "digital gold" argument. Mining stops when the cap is reached, so no extra Bitcoin can be created. Proponents say this scarcity can preserve value as demand grows. The source also notes that a supply cap does not guarantee the price will rise.

Bitcoin rose more than 120% in 2024 and traded above $90,000 in December 2024, then broke $100,000 within days. One calculation compared a 2011 price of 30 cents with $94,420 in early January 2025, yielding roughly 147% annualized. The source uses that number to warn against assuming the same pace continues.

Ethereum and Other Major Coins

Ethereum is a blockchain platform for smart contracts and decentralized apps. An illustrative portfolio guide calls it the second most important cryptocurrency, tied to DeFi and the NFT ecosystem.

Ethereum also matters for institutional infrastructure. Its ecosystem supports a market worth roughly $450 billion. Flashbots, tied to Ethereum transaction flow, grew out of research by Paradigm general partner Charlie Noyes.

Stablecoin infrastructure is a big Ethereum use case. The cost to send USDC on Ethereum fell from $12 in 2021 to about $1. The same transaction on Coinbase's Base network cost less than one cent. These improvements show how scaling tech can make blockchain more practical.

Crypto Categories Worth Knowing

The portfolio-building material tells beginners to start with high-market-cap, liquid assets with a long operating history. It names Bitcoin, Ethereum, Cardano, and Solana as well-known, widely used options. It says beginners do not need to start with unknown or riskier coins.

The same material includes BNB, ADA, and SOL as established altcoins for growth and diversification. These carry different tech, liquidity, governance, regulatory, concentration, and adoption risks. Being well known does not remove the chance of a large loss.

Major crypto categories

Altcoins are cryptocurrencies other than Bitcoin. The material covers projects in DeFi, payments, smart-contract infrastructure, exchanges, and storage. Researching an altcoin means examining its purpose, team, token, roadmap, partners, competitors, unique selling points, community, and public sentiment.

A small market cap does not mean a project solved a meaningful problem. A large market cap does not prove the price will keep rising. One commenter estimated Bitcoin could support a market worth $20 trillion to $100 trillion or more, while other networks might address markets of only a few trillion dollars. These are opinion-based estimates, not set valuations.

One commenter estimated Bitcoin could support a market worth $20 trillion to $100 trillion or more, while other networks might address markets of only a few trillion dollars.

Brian Jung's six altcoin picks before 2027

Jung walks through Bitcoin's current level, why he thinks the bottom is in, his research framework, and six altcoins he's accumulating across different narratives. Includes a DCA tool link and newsletter signup.

Why People Put Money Into Crypto

The source material gives several reasons for investing in crypto.

Investing in developing technology. Crypto is sometimes described as a bet on future tech. Payment cards were once unfamiliar, and crypto may follow a similar path. Supporters argue blockchain could eventually be used across entertainment, finance, government, payments, gaming, and social apps.

The proposed three-stage development goes like this: crypto begins as money, then becomes a financial system, then turns into an internet platform for ownership and direct user-to-user interaction. The source presents this as a possible path, not a guaranteed timetable.

A hedge against currency debasement. Supporters argue Bitcoin's fixed supply can protect value against inflation. One commenter compared it to gold, which rose from about $193 per ounce in 1978 to roughly $2,680, producing a 7.4% combined rate tied to monetary-supply expansion. He argued Bitcoin could offer similar protection while also being divisible, transferable, and available 24/7.

The counterargument: Bitcoin produces no earnings, interest, rent, or cash flow. Its value depends on future demand and market expectations. The material does not resolve whether those expectations will hold.

High potential returns. Bitcoin's price rose substantially between 2012 and 2021 and jumped more than 120% in 2024. Supporters say a small allocation could have an outsized effect on portfolio returns. The same material repeatedly stresses that past returns cannot be assumed to continue.

Portfolio diversification. Francis Bayes picked a 2% crypto allocation partly because he saw crypto as having weak correlation with stocks. He said 1% to 5% appeared to be a reasonable sweet spot for taking advantage of volatility while limiting emotional and portfolio risk.

For some, crypto is crypto as part of a bigger portfolio plan . For others, it is a standalone bet. The source makes clear both approaches carry real risk.

Why Crypto Is Risky

Crypto markets are hit by regulatory changes, tech developments, macro conditions, market sentiment, liquidity, and speculative cycles. Prices can swing fast, and the source repeatedly calls crypto more volatile than traditional stocks or currencies.

The main risks include:

Key crypto risks

VanEck states that crypto generally lacks legal-tender status, is not backed by a government, and is not covered by FDIC or SIPC insurance. Its value comes from supply and demand and can vanish if market participants stop exchanging fiat for it.

The Colonial Pipeline hack of May 2021 shows Bitcoin is not always anonymous. The ransom was paid in Bitcoin, and authorities recovered much of it. Public ledgers can reveal transaction paths even when real-world identities stay unclear.

VanEck states that cryptocurrency generally lacks legal-tender status, is not normally backed by a government or central bank, and is not covered by FDIC or SIPC insurance.

How to Research a Cryptocurrency

The "Do Your Own Research" principle repeats through the source. Decisions should not rest on another investor's opinion, social-media buzz, or a prediction about future adoption.

For each project, the source recommends examining:

Research checklist for crypto

Detailed info does not guarantee success. Whitepapers can be promotional, large teams can mess up, and a liquid token can still lose most of its value.

Setting Goals and Limits

A short-term trader, a long-term holder, and someone building retirement savings all have different objectives. The source says the purpose of the investment should shape both the strategy and the asset selection.

A recurring rule across the material: invest only what can be afforded to lose. The loss could be a temporary dip, a long period of underperformance, or a complete wipeout. You may also lose access through an exchange failure, wallet mistake, hack, or lost private keys.

Time horizon matters. One commenter planning to retire in seven years rejected an asset that other Bitcoin holders expected to realize most gains over two decades. His traditional investments were expected to meet his retirement goal, while Bitcoin was a separate goal with a longer, less certain timeline.

Building a Portfolio Gradually

A portfolio-building guide defines a crypto portfolio as the collection of different cryptocurrencies an individual holds or trades. The collection can include Bitcoin, Ethereum, altcoins, stablecoins, and NFTs.

The guide recommends starting small and expanding as experience grows, rather than investing everything at once. A crypto-only portfolio should spread funds across assets instead of betting on one token. The goal is to reduce reliance on a single asset and potentially offset a loss in one coin with gains in another.

For getting into crypto , the process stays the same: research, goal setting, position sizing, gradual buying, security, and monitoring. Platform-specific steps are not a substitute for researching the actual assets.

Illustrative Allocation Models

For an illustrative €1,000 crypto allocation, the guide suggests:

Sample 50/30/20 crypto split

The allocation is explicitly illustrative, not a universal recommendation. Each investor needs to adjust for risk tolerance, interests, and long-term goals.

The accompanying Reddit screenshot highlights comments about discipline, patience, and risk management.

Dollar-Cost Averaging

Dollar-cost averaging, or DCA, means investing a fixed amount at regular intervals - weekly or monthly - regardless of whether the price is rising or falling.

The stated purposes of DCA are to:

Why DCA can help

DCA does not prevent a loss if the chosen asset drops permanently. It also does not tell volatility apart from a broken project. Research still needs to happen before recurring purchases begin.

Francis Bayes used recurring-purchase capability as a big reason for holding crypto on an exchange. During the summer 2022 Bitcoin crash, he wanted to buy more but feared prices could fall farther. He bought only small amounts instead of one large lump sum. He wrote that non-automatic investing is hard because fear can stop a rebalancing plan at the bottom and excitement can stop it near the top.

A commenter suggested an alternative: invest 2% of savings into Bitcoin each year and do not rebalance. The idea was that regular contributions could increase exposure over time and avoid selling during a drawdown. Another commenter argued someone who expected Bitcoin to beat stocks might rationally invest more sooner so compounding has more time to work.

The response: future returns are uncertain, and "expected" performance depends on assumptions that may not play out. The source preserves both approaches rather than treating one as universally correct.

Portfolio Allocation and Rebalancing

Francis Bayes's 98/2 split. His portfolio is 98% stocks in index funds and 2% crypto. He chose 2% after considering a range of 1% to 5%. He says the gap between 1% and 2% would have little effect on the total portfolio, while moving from 2% to 5% would add significant risk and emotional strain.

He rebalances stocks annually with new retirement contributions. Crypto gets handled more actively. He buys when crypto hits the lower threshold and sells when it hits the upper:

Bayes rebalancing rules

He keeps the plan in writing and formatted a spreadsheet so cells turn yellow when the allocation leaves the target range.

When crypto exceeded 2.5% in fall 2024, Bayes did not sell at Bitcoin prices of $90,000, $95,000, or $98,000 because he feared missing further gains. He finally sold the excess while writing about the need to follow his own rebalancing plan.

Most of Bayes's stocks were in tax-protected accounts, which generally could not hold crypto directly. He used new cash from checking to buy crypto below the lower threshold. When selling above the upper threshold, he used proceeds to buy stocks in a taxable account because he preferred the liquidity of his checking cash for current spending.

He wrote that non-automatic investing is difficult because fear can stop a rebalancing plan at the bottom and excitement can stop it near the top.

Other Allocation Models

The source contains several more allocation approaches:

Different allocation models from the source

These allocations reflect sharply different assumptions. A 2% loss has limited effect on a 98% stock portfolio, while a 50% crypto allocation can swing very hard. The 2% and 5% examples also differ on whether losses should trigger extra buys or whether the original position should be allowed to fall.

These are not the only solid crypto picks - but being established or well known does not remove the possibility of a large loss.

The Risk of Rebalancing After a Total Loss

The discussion contains an unresolved warning. The White Coat Investor argued that even a 2.5% allocation could eventually eat an entire portfolio if Bitcoin fell to zero and the investor kept rebalancing by buying more after every drop.

Bayes replied that rebalancing above and below his thresholds was meant to exploit volatility and could improve returns in theory even if Bitcoin did not beat stocks long-term. The counterargument: the theoretical benefit fails if the asset goes to zero.

The source does not resolve the conflict. Both approaches depend on the future path of prices and on the investor's ability to keep following the plan after a severe loss.

The White Coat Investor argued that even a 2.5% allocation could eventually consume an entire portfolio if Bitcoin fell to zero and the investor continued to rebalance by buying more after every decline.

CryptoJon's November 2026 altcoin predictions

Jon lists altcoins he's watching for late 2026 with price targets. Light on methodology, heavy on specific tickers. Discord and Patreon links in description for follow-up.

Francis Bayes's Crypto Case Study

Bayes first wrote about buying crypto in December 2021, when Bitcoin was in the $40,000s. By July 2022, Bitcoin had fallen below $20,000. Some readers ridiculed the thesis, and one forum member called it "copium." By December 2024, Bitcoin was above $90,000 and soon passed $100,000.

Bayes says his crypto position was smaller than some physicians' paychecks and was unlikely to have a big effect on his path to financial independence. He describes himself as "winning" with crypto because he followed his financial plan, not because crypto was responsible for most of his wealth.

His investment policy statement was: "Some smart people will figure out some useful things with crypto, and I do not want my FOMO to affect other aspects of my financial plan."

He says the first part of the thesis did not develop as expected because people in crypto scams got caught. He continued because the second part addressed his own behavior and kept crypto from interfering with the rest of his plan.

Holding Through Volatility

If crypto had gone to zero, Bayes says he would have been upset for a day, a week, or maybe longer, but then moved on because his overall portfolio still exceeded his target of a 5% real annualized return. He believes selling would have produced more regret, since people who kept holding appeared to gain while he was out.

He also argues that selling during negative sentiment could have pushed him back into crypto or into riskier individual stocks. Since Bitcoin rose more than 120% in 2024, someone buying at almost any point from January through November could have earned a positive return. That does not account for the volatility within the year, but it shows how hard timing an exit after a decline can be.

Bayes identifies anchoring as another risk. A seller may fixate on the purchase price, decide the asset has "already fallen enough," and wait for a recovery that never comes. His small position let him observe how fast market sentiment shifts. He compares it to checking the temperature in different market conditions and being exposed to dramatic price swings.

He notes that international stocks and small-cap value stocks have also underperformed U.S. large-cap stocks. He accepts that underperformance because it fits his broader allocation. He does not want the emotional ups and downs that come from repeatedly moving in and out of the same positions.

Annualized Real Return

Until 2024, Bayes's crypto allocation had a negative annualized real return. The reported effects:

Bayes portfolio effects by year

In 2024, the crypto position produced a real return of 91% despite selling some Bitcoin for rebalancing. The allocation never exceeded 3% during the year. Crypto improved the total portfolio return by 1.29%, and the crypto position's annualized real return moved from negative to positive.

From 2021 through 2024, crypto improved the overall portfolio's annualized real return by 0.22%. Against a baseline projection of 5% real annual growth, the 0.22-point improvement over 30 years was calculated as an extra $2,800 for every $10,000 invested. Bayes explicitly says he does not expect crypto to keep outperforming at that rate as it matures. He also questions whether 2022-2023-style volatility cycles could persist for 30 years.

Bayes describes crypto's positive contribution as a secondary benefit. His main allocation stays the 98% stock portfolio, which he wants to leave uninterrupted for compounding. He invokes Charlie Munger's rule of "never interrupt compounding unnecessarily." Munger also called crypto "rat poison," a tension Bayes acknowledges.

Political Events and Investing

Bayes's author note says political developments, including the 2024 presidential election, may have contributed to Bitcoin's price momentum. His position: politics and personal investing should not mix. A portfolio built to manage long-term risk should not change just because an election, politician, or news cycle looks favorable.

He does not state whether the reader should buy Bitcoin at the time of the column. He says he does not know the reader's financial plan, investment history, crypto experience, or risk tolerance. He states definitively that Bitcoin's current price should not determine whether someone changes a financial plan.

The Bitcoin Investment Debate

Store of value versus speculation. Supporters describe Bitcoin as a bearer asset, like gold but digital. It can be held without a bank, transferred globally, divided into small units, and sold continuously. They argue fixed supply prevents government-driven debasement and growing adoption can increase demand.

Skeptics argue Bitcoin produces no earnings, interest, rent, or dividend. Its value depends on what another person will pay. In that view, an owner only profits if the asset can later be sold for more. The debate centers on whether Bitcoin is money or a speculative asset whose price depends on future adoption.

The source also includes a plain definition: an asset is property owned by a person or company and regarded as having value that can meet debts or commitments. Supporters argue Bitcoin can be transferred to settle a debt, even if it is not widely used for ordinary purchases. Critics say limited acceptance and no recurring cash flow make it speculative in its current form.

Hard asset and digital scarcity. One commenter described Bitcoin as a hard asset whose value tends to rise relative to fiat. He said Bitcoin became the fastest asset to reach $1 trillion and argued government or institutional adoption could continue. The same commenter noted Bitcoin has a fixed cap, is highly divisible, moves fast globally, and trades 24/7.

Skeptics counter that gold, art, real estate, and other assets also rise in nominal price because of currency debasement. They ask why people would pay more in future fiat for an asset that produces nothing. The response: market participants may hold Bitcoin as a monetary asset the way they hold gold.

Gold Comparison and Projected Market Size

VanEck's no-jargon resources include a discussion of gold and Bitcoin working together rather than as direct substitutes. Gold is a traditional store of value, while Bitcoin offers digital scarcity with different portability and divisibility.

A commenter compared Bitcoin and gold: gold moved from roughly $193 per ounce in 1978 to about $2,680, a 5.6% annualized price increase. Adding an estimated 1.8% annual mined supply increase produced a combined 7.4% rate tied to historical money-supply expansion. He argued Bitcoin's market cap could eventually exceed gold's because Bitcoin is easier to divide and transfer.

At the time of discussion, Bitcoin was described as having a market cap around $2 trillion. A bullish commenter argued it could eventually represent a store of worth $20 trillion to $100 trillion or more. The White Coat Investor used a different comparison: the total value of fiat money and global assets sets a ceiling, and the 2011-2025 return pace could not continue.

No source establishes a reliable maximum market cap. The figures are scenario estimates depending on adoption, regulation, competition, tech, and Bitcoin's future role.

Past Returns Cannot Be Extrapolated

The White Coat Investor argued Bitcoin's move from roughly 30 cents in 2011 to $94,420 in early 2025 represented about 147% annualized. At that pace, he said Bitcoin would reach millions within a few years and its market cap could approach the world's net worth much sooner. He uses "Trees don't grow to the sky" to argue historical growth rates cannot continue forever.

The counterargument: Bitcoin's return may slow as its market cap grows. The source also distinguishes between a one-time adoption curve and the chance that Bitcoin becomes a mature asset. The 2024 return of more than 120% was described as exceptional and not necessarily repeatable.

Present Utility

The White Coat Investor argues Bitcoin stays speculative because it is not widely used for groceries, gasoline, rent, wages, or ordinary U.S. transactions. He says he would use it if the people he needed to pay accepted it, but he has no such need today.

Bullish commenters argue Bitcoin is already money for large transfers, savings, and cross-border settlement. They describe it as comparable to high-value payment rails rather than a coffee-shop method. One commenter claims Bitcoin's network settled more transaction volume than FedWire, while acknowledging its value volume remains lower.

Other examples: buying gift cards with Bitcoin via Lightning, paying for drinks internationally by scanning a QR code, El Salvador accepting Bitcoin as legal tender, businesses accepting Bitcoin where tax treatment does not make spending impractical, large cross-border payments that would otherwise need a bank, and holding Bitcoin rather than fast-depreciating fiat.

The source also notes taxes can discourage spending. In the U.S., using Bitcoin for a purchase may be treated as disposing of one capital asset and acquiring another, creating a capital-gains event. One commenter argued for a de minimis exemption or change in capital-gains treatment. This was an opinion about potential tax policy, not an existing rule.

Confiscation and Private Keys

Bitcoin supporters argue ownership is controlled by private keys, not a bank account. They describe Bitcoin as less confiscatable than land, stocks, gold, or fiat. If a person holds the private keys, another cannot transfer the coins without authorization.

The White Coat Investor calls Bitcoin "less confiscatable," not unconfiscatable. He argues physical coercion, confiscation of the device, lost keys, or government control over exchanges can still affect access. He points to Operation Choke Point, government access restrictions, and the possibility the U.S. could prohibit or restrict crypto.

Supporters respond that physical possession of keys is meaningfully different from a bank account that can be frozen by administrative request. They argue a hardware wallet offers more direct control. Critics say self-custody shifts the burden of backups, password management, malware protection, and inheritance planning to the owner.

Transaction Tracing and Crime

The Colonial Pipeline incident challenges the idea that Bitcoin transactions are anonymous. The public ledger records transfers, and law enforcement can follow addresses through exchanges and other services. The source also raises the risk that coins tied to crimes may be treated as tainted.

These discussions sit alongside the claim that Bitcoin's transparent ledger can help recover stolen funds. A transaction may be pseudonymous rather than anonymous, but it can still be traceable in some cases.

Strategic Reserves and Institutional Adoption

Several commenters argue national Bitcoin strategic reserves could trigger purchases by other governments. They describe possible reserve announcements by the U.S. and other countries as a signal that nation-states may compete to accumulate Bitcoin.

The source does not verify those forecasts. It presents them as bullish arguments, alongside the opposing point that Bitcoin has repeatedly been called the future of money without ordinary payment adoption materializing.

Institutional developments cited:

Institutional crypto adoption signals

The source also records the opposite view: institutional products do not remove the risk of a large price decline. Products may involve management fees, trading costs, custody arrangements, and regulatory limits.

Trading, Holding, and Long-Term Returns

The material distinguishes among several strategies:

Common crypto strategies

Buy-and-hold supporters argue frequent trading reduces the chance of capturing long-term appreciation. Critics say selling during a downturn can permanently remove the asset and make it hard to re-enter at a higher price.

Choosing an Exchange and Account Type

The source presents several exchange questions:

Exchange checklist

Francis Bayes keeps his crypto on a well-established exchange because recurring purchases matter more to him. He says he may eventually transfer some to a wallet but is not concerned enough to change the setup as long as the brokerage security is acceptable.

A commenter asked whether a cold wallet would be safer. The source describes cold storage as technically tricky, while self-custody introduces risks with passwords, seed phrases, hardware, software, and user error. A wallet can reduce exchange dependence, but it can also make a mistake unrecoverable.

Swissborg is presented as an app that facilitates buying, selling, and exchanging crypto in 16 fiat currencies with transparent fees. The source claims this lets a user skip checking multiple exchanges, completing multiple KYC processes, and doing manual portfolio analysis. It is an example of a service model, not an independent security assessment.

Related inheritance material states that crypto differs from a bank account because no one can access it without the private keys or seed phrase. Without a plan and a key transfer, assets may be inaccessible after the owner dies.

Security and Self-Custody

The material lists several security risks:

Crypto security risks

The source recommends learning proper security practices, choosing an exchange carefully, and keeping up with market and project changes. It does not prescribe a single custody arrangement.

Mistakes and Behavioral Risks

The source material identifies these mistakes and behavioral risks:

Common crypto mistakes

A person should not use emergency funds, money needed for near-term expenses, or funds that would force selling. The source repeatedly uses the rule: invest only what can be afforded to lose.

The portfolio guide tells beginners to start with high-market-cap, liquid, established assets rather than unknown coins. It does not say established assets are safe; it treats familiarity and liquidity as a starting point for research.

The "Do Your Own Research" rule repeats in both the Swissborg and Bitcoin Store material. Social media, influencers, forums, and group chats can amplify momentum, rumors, or deliberate pump-and-dump activity.

A token can have a strong community or a dramatic price jump without solving a meaningful problem. The source recommends examining the tech, team, roadmap, use case, competitors, and adoption.

Francis Bayes says having threshold rules written down helps separate the plan from emotion. Without a written plan, an investor may buy only after a severe decline or refuse to sell after a large gain.

Paradigm: Institutional Crypto Research

A Colossus profile describes Paradigm as a $12 billion crypto investment firm founded by Matt Huang and Fred Ehrsam. The firm is presented as a research lab, engineering org, and investment company.

Matt Huang described the firm as "running the X-Men academy," a place for unusual technical talent. Charlie Noyes, the first employee, was a 19-year-old MIT dropout who arrived late to his first 10 a.m. meeting and later became a general partner. Georgios Konstantopoulos, the CTO, went from World of Warcraft player to prolific crypto engineer. Paradigm also discovered a developer called transmissions11 on Discord while still in high school.

Huang said the people created "absurd amount of chaos" but were capable of work nobody else could do. The profile attributes the firm's success to technical ability, focus on foundational research, and a willingness to build infrastructure rather than only fund existing projects.

The firm's researchers also invest. They work on cryptographic mechanisms, open-source code, security, legal issues, and policy, then make results available to the industry. The profile says Paradigm's tools power roughly 90% of smart-contract development. Harvard, Stanford, Sequoia, and Yale are named as investors.

Matt Huang's Background

Huang is the son of Chi-fu Huang, a financial theorist and computer-science professor, and Marina Chen, a computer-science professor. His family moved to Tokyo in 1997 when his father was sent to establish the Asian office of Long-Term Capital Management. Huang was nine and walked alone through Tokyo about an hour each way to school.

His father previously ran LTCM's Asian trading operation and worked at Goldman Sachs and MIT. His mother did parallel-computing research at Caltech and was among Yale's first female computer-science professors. The family had three sons and held academic and financial talks at the dinner table.

The Tokyo period ended in 1998 when LTCM's models failed during the Russian financial crisis. The collapse wiped out the family's savings. Chi-fu Huang and Myron Scholes founded Platinum Grove Asset Management in 1999. The firm grew from $45 million to $6 billion in under nine years.

Huang attended school in Taiwan and Scarsdale, New York, and was one of only three Asian students in a predominantly Jewish school. He was expelled from Chinese weekend school for disrupting class, later discovered math, and developed interests in poker, chess, and StarCraft.

At MIT, he studied math and took a semester off to play online poker at eight tables at once. A friend, Albert Ni, left MIT to become Dropbox's sixth employee, which led Huang to read Paul Graham's essays and consider a Silicon Valley career.

Huang and his roommates applied to Y Combinator and were initially rejected. Graham told them, "We love you guys. We couldn't hate your idea more." Six months later, with a working prototype, they were accepted. Their startup, Hotspots, was a TV guide for streaming and lasted two years before being acquired by Twitter. Huang then observed Twitter before its IPO.

Formation of Paradigm

Fred Ehrsam, a Coinbase co-founder, contacted Huang at Sequoia in 2017 after publishing an argument that crypto was the metaverse. Their discussion became a 40-email exchange about crypto's potential. They spent six months testing whether their investment philosophies and fund structures could work together.

The original partnership was a 50/50 split. Ehrsam later stepped back to spend time on crypto and a brain-computer-interface startup. Alana Palmedo joined four weeks after founding and became the third managing partner.

Huang and Ehrsam had two main theses: crypto would become one of the most important technical and economic shifts of the coming decades, and the industry needed a crypto-native investor who could both evaluate founders and help build underlying tech.

The first Paradigm fund raised $400 million in late 2018 from Harvard, Stanford, Yale, and Sequoia. It was open-ended with no fixed deadline for returning capital and could hold public crypto assets and private investments.

Paradigm initially called its full $400 million and invested about 90% in Bitcoin and Ethereum. The average Bitcoin purchase price was roughly $4,000 to $5,000 during the 2018 crypto winter, when Bitcoin had fallen more than 70%. Paradigm managed over $12 billion by 2025, up from $400 million in six years. Public filings show the first flagship fund growing from $760 million to $8.3 billion. Paradigm had also returned all limited partners' initial capital and paid over $1 billion to investors. In mid-2019, the original group committed another $360 million.

Research as Investment Strategy

Paradigm's approach differs from a conventional venture fund. Instead of waiting for founders to build a product, Paradigm researchers identify fundamental technical problems and try to solve them.

Dan Robinson, a former lawyer and self-taught programmer, joined partly to do exploratory research. He explained: "Most investment research is about gathering and analyzing existing info. We're trying to invent new things."

The research team has worked on or supported:

Paradigm research projects

The research team attends investment meetings and contributes technical, security, legal, and policy expertise. Coinbase CEO Brian Armstrong said Paradigm can help portfolio companies build because it has experts in protocol design, security, law, and policy.

Bullseye Liquidity and Uniswap

Bullseye liquidity is a proposed system for trading stablecoins. Existing decentralized exchanges can require a separate pool of capital for every asset pair, creating fragmented liquidity. The proposed system would combine those pools into a more efficient market. The researchers intended to publish the work openly, even though it could help companies like Uniswap and Noble.

Vitalik Buterin proposed the constant-product equation x*y=k on Reddit in 2016. The formula became the foundation for large decentralized markets without a conventional order book. Paradigm researchers later worked with Uniswap founder Hayden Adams. Contributions to Uniswap v2 enabled trading between Ethereum-based tokens and helped expand protocol volume from roughly $2 billion to over $1 trillion.

During 2019, the team researched concentrated liquidity. Uniswap v3 allowed traders to concentrate capital within specified price ranges and improved capital efficiency by up to 4,000 times. The profile gives an example: a $5 million concentrated position could provide the same depth as $2 billion spread across all possible prices. Uniswap was valued at roughly $1.7 billion by October 2022.

Blend, NFT Lending, and Terra

When Blur asked Paradigm about margin trading for NFTs, the research team spent four months developing a lending protocol called Blend. The underlying research aimed to address lending against assets with hard-to-estimate prices. The broader aim was lending against illiquid assets that could adapt to other difficult collateral. Blend quickly developed a separate lending category.

Paradigm did not invest in popular algorithmic stablecoin projects like Terra. The firm's researchers believed those mechanisms had not solved the underlying stability problems after years of trying to design better systems. This is presented as an example of technical due diligence that differs from investing based on market attention.

The Three Stages of Crypto Development

Huang sees crypto developing first as money, then as a financial system, and finally as an internet platform.

The money stage creates users who buy a first Bitcoin, set up a wallet, and then get interested in other crypto apps. Bitcoin's growth from 2008 to nearly $2 trillion is described as evidence of adoption by nation-states, institutions, and individuals. The source also says Bitcoin reached one million users in 2011.

The second stage adds stablecoins, exchanges, lending, derivatives, settlement, and 24/7 markets. These systems can operate on permissionless rails and avoid some traditional intermediaries. Stablecoin circulation is presented as infrastructure developing faster than many expected. The 2017 ICO bubble brought crypto-rich investors in, and some capital went into stablecoin projects.

The third stage would support direct ownership, user-to-user interactions, social apps, gaming, and digital assets without centralized control. High transaction costs have limited everyday use so far, but new scaling tech could reduce them. Huang compares crypto with the early internet - early critics called email technologically interesting but economically naive, just as some critics describe crypto now.

Huang compares crypto with the early internet. Early critics described email as technologically interesting but economically naive, just as some critics describe crypto. He says adoption of a multiplayer technology requires many people to participate, making it different from a single-user tool such as AI.

Stablecoin Infrastructure and Adoption

The profile gives multiple examples of stablecoins used for practical settlement:

Stablecoin real-world use cases

Stripe co-founder Patrick Collison wrote: "Stablecoins are room-temperature superconductors for financial services. Thanks to stablecoins, businesses around the world will benefit from significant speed, coverage, and cost improvements in the coming years."

The source treats stablecoins as promising infrastructure while also noting that crypto remains vulnerable to scams, hacks, volatility, and poorly designed projects.

Crypto's Dark Side

The profile acknowledges that crypto can resemble a casino. It describes scams and hacks, meme coins that reward short-term speculation, projects that collapse, token prices that change violently, founders and promoters whose claims clash with their actions, short-lived speculative bubbles, market manipulation, and regulatory uncertainty.

Huang compares crypto with the early internet, which attracted both researchers and fraudsters. He argues speculative waves can bring talent and capital into infrastructure that later becomes important. The 2017 bubble produced crypto-rich investors, some of whom funded infrastructure that became more useful after the speculative period ended.

Crypto Cycles and Paradigm's Mistakes

In May 2023, Paradigm briefly removed "crypto" from its public website and social media, calling itself a research-driven technology investment firm. The change reportedly came after potential AI collaborators did not respond when they saw "crypto" on the website.

The change caused industry backlash. One portfolio company said, "We don't want to work for you anymore," referring both to the rebranding and to Paradigm's investment in FTX. Paradigm restored the word and added a homepage display reading "crypto crypto crypto."

At the same time, Bitcoin had fallen 75% from its 2021 peak to below $16,000 in November 2022, while Ethereum fell 80%. ChatGPT's launch in November 2022 shifted tech market attention toward AI.

Before the downturn, Paradigm's Bitcoin position had multiplied roughly 15 times, Coinbase had gone public at an $85 billion valuation, and the firm had raised a $2.5 billion venture fund. The profile says the firm later admitted it made mistakes during the cycle.

Fred Ehrsam sent a March 2021 letter titled "Surviving Crypto Cycles" to portfolio companies after prices doubled in two months. The letter warned that Bitcoin had crossed $1 trillion and that "Senators even have lasers for eyes! Euphoria abounds." It recommended stress-testing systems for 10x to 100x usage increases, raising capital while available, and preparing employees for the possibility that prices and employment could change.

Paradigm later grew from 18 to 62 people and admitted it may have lowered hiring standards trying to match competitor a16z. Huang said, "When you over-focus on a rival, you become more like the rival." The investing and research team grew to 20 in 2021, then was cut to 11. The profile describes this as leaving Paradigm smaller but more focused.

FTX and Other Losses

Paradigm invested $278 million in FTX. The exchange became a public face of crypto, with Sam Bankman-Fried speaking at conferences, testifying before Congress, and appearing in financial media.

During due diligence, Paradigm identified the FTX-Alameda Research relationship as a key risk. The team asked direct questions and got false assurances, according to the profile. FTX later collapsed amid fraud charges and revelations that customer funds were misappropriated.

Huang said the failure revealed a mismatch in goals: "It was pretty clear, even at the time, that he didn't share our vision for making crypto better. For him, it was a way to make a ton of money and then give it away." The loss led Paradigm to add an explicit requirement that founders align with the firm's mission.

Paradigm also co-led OpenSea's $300 million Series C at a $13.3 billion valuation during the NFT market peak. OpenSea's trading volume later fell 98%. BlockFi, another portfolio company, went bankrupt after FTX exposure. The source presents both losses as examples of risks of investing during speculative peaks.

Huang said: "In venture capital, there are going to be investments that don't turn out the way you hope. That's always an opportunity to reflect, and we've done a lot of that." He also said, "Down years are easier than up years. Signal to noise is very high and okay, prices are down, but with a long-term perspective, that doesn't bother us."

Open-Source Infrastructure

Georgios Konstantopoulos built Foundry, an open-source tool for writing and testing secure smart contracts. The source compares it to spell-check for blockchain code, except it can prevent bugs affecting smart contracts. The profile says Foundry became an industry standard within months, reached 90% market penetration, and was used to secure over $100 billion in smart contracts.

Ethereum's original node software was described as inefficient and hard to scale. Konstantopoulos proposed rebuilding the core node software from scratch. His team said the project would take five years, but Reth was done in 18 months. Reth is described as 80% smaller than alternatives, ten times faster, and used by Coinbase's Base, WorldCoin, and Optimism.

Konstantopoulos hires engineers by reviewing open-source contributions rather than relying only on interviews. His principle: "The code doesn't lie. I want to see how people think through real problems."

Ithaca was spun out of Paradigm in October 2023 with a $20 million investment. Konstantopoulos stayed as Paradigm's CTO while becoming Ithaca's CEO. The company aimed to commercialize infrastructure that large teams might otherwise take years to build.

Konstantopoulos said: "Things people tell you are hard usually aren't. They're only hard because you don't have agency over your tools." The profile says Paradigm's open-source work attracted developers who later became founders, joined portfolio companies, or joined Paradigm itself.

AI and the Future of Crypto

Paradigm considered expanding into AI but kept its focus on crypto. Huang said: "AI is going to be fine with or without us. Crypto is a very important technology that needs to coexist with AI, but there aren't a lot of great champions. We believe it's important for us to work on it, to make sure that it actually succeeds."

The profile characterizes Huang as calm, rigorous, and patient. Patrick Collison described him as suited to a complicated technology whose consequences are back-loaded. The source presents this temperament as relevant to crypto because adoption may take many years and may pass through speculative bubbles.

No-Jargon Crypto Resources

VanEck published a list of educational resources on May 27, 2021. The list covers Bitcoin, portfolio construction, mining, institutional adoption, bad actors, Ethereum, regulation, and environmental concerns.

The resources include Jan van Eck's two-page Bitcoin introduction covering who controls the software, development and upgrades, supply limits, and risks. Another piece discusses the late-2020 Bitcoin rally and possible drivers, including lending, secure infrastructure, institutional adoption, and supply limitation.

Pierre Rochard, identified as a Bitcoin strategist at Kraken, gives a 30-minute explanation of Bitcoin, factors to consider when adding it to a portfolio, mining, authenticity and value, and the difference between a functioning network and market speculation.

Kyle DaCruz, VanEck's Director of Digital Assets Product, discusses Bitcoin as a store of value or digital gold, potential portfolio diversification, risk and return, limited supply, and investor adoption.

Other resources cover Bitcoin's supply shortage, gold and Bitcoin working together, institutional adoption trends, Bitcoin mining and ESG concerns, bad actors and the Colonial Pipeline hack, and a Q&A on Ethereum's bull and bear cases.

The source also mentions additional reading: The Bitcoin Standard by Saifedean Ammous, Broken Money by Lyn Alden, The Bullish Case for Bitcoin, condensed Broken Money presentation, a resource called "What's the Problem?", Michael Saylor talks, and essays about monetary history, fiat currency, and Bitcoin.

One commenter argued that readers who do not understand Bitcoin after studying these resources should avoid buying it and stick with index funds. The broader point in the source is that education should help investors understand both the tech and the risks rather than relying on slogans.

Risk Disclosures and Limitations

The source material contains several overlapping warnings from VanEck, Bitcoin Store, and other investment discussions.

VanEck states it may offer investment products in crypto-related asset classes or industries. Its content is not an offer to buy or sell any cryptocurrency and is not a recommendation. Opinions may change, and non-proprietary info is believed reliable but not guaranteed.

Cryptocurrency is described as a digital representation of value that may function as a medium of exchange, unit of account, or store of value. It generally lacks legal-tender status, is not normally backed by a government or central bank, and can be exchanged for dollars or other currencies. Its value comes from supply and demand, and the market can disappear.

Potential permanent and total loss is possible if buyers stop accepting a cryptocurrency or if its market fails. Cryptocurrencies are not covered by FDIC or SIPC insurance.

Additional risks include flash crashes, market manipulation, cybersecurity attacks, exchange and platform failures, regulatory changes, lack of customer protections, complex and hard-to-understand tech, attacks that overwhelm a blockchain, transaction finality differences, limited operating history, substantial fees, tax consequences, and inability of a merchant who accepts crypto today to accept it in the future.

Bitcoin Store states it is not a financial-advisory company and is not authorized to provide investment or financial advice. Its content is informational and should not be used as the basis for an investment decision. Crypto trading is speculative, prices can fluctuate fast, and losses can occur.

VanEck concludes that diversification does not guarantee a profit or protect against a loss in a declining market. Past performance is not a guarantee of future results, and all investing involves the possibility of losing money.