Every year, our team reviews Cathie Wood's reports. Since 2023, we have continued this practice into the third year. Although in recent years, Cathie Wood's aggressive strategy in alpha tech stocks has underperformed compared to mainstream market funds, her annual "BIG IDEAS" reports, from a disruptive innovation perspective, are worth in-depth reading by every investor. In a sluggish market, we focus on research, share value, and create win-win situations, which is a consistent tradition of our Blue Ocean Capital. At the end of this document, there is a bilingual PDF translation available for free upon completing a small task. Grateful 🙏

Next, let's take a look at what this year's Cathie Wood's "BIG IDEAS 2025" discusses.

The report begins with a chessboard story and uses the metaphor of the "second half of the chessboard," which left a deep impression on me. Current computing power has completed 48 performance doublings and has officially entered the "second half of the chessboard." This means that technological advancements will accelerate in the coming years, indicating the accelerating effect of technological progress. The barriers of traditional industries are gradually blurring, and cross-industry integration will give rise to unprecedented new business models, providing investors with excellent perspectives and opportunities to capture long-term value. As a seasoned investor, I feel that this is not just a change in numbers but a fundamental paradigm shift. In the face of such a major transformation, one must either adapt or be eliminated.

Currently, the boundaries of traditional industries are disappearing. The integration of five major technology platforms (#AI, blockchain, energy storage, robotics, and multi-omics) is giving rise to unprecedented business models. This poses challenges for our portfolio construction: we should abandon traditional industry classifications and shift towards cross-domain innovative thematic layouts.

Here, we will first discuss the five core innovative platforms and eleven big ideas mentioned in the report, with a focus on the opportunities in #AI and cryptocurrency, along with price predictions for #BTC under optimistic, neutral, and pessimistic scenarios.

🧐 Five Core Innovative Platforms: The report identifies five key technology platforms driving future accelerated growth:

• The adoption of artificial intelligence (AI) neural networks may be more transformative than electrification, with specific AI computing hardware set to dominate the next generation of cloud data centers, expected to create trillions of dollars in value.

• Public blockchain currencies and contracts will migrate to public blockchains that provide digital scarcity and proof of ownership, leading to a restructuring of the financial ecosystem due to cryptocurrencies and smart contracts, making digital wallets increasingly important.

• Humanoid robots in robotics will work alongside humans, 3D printing will facilitate the digitization of manufacturing, and reusable rockets will continue to lower launch costs.

• Advanced battery technology in energy storage will drive the development of electric propulsion systems for autonomous driving, with cost reductions unlocking micro-mobility and aerial systems combined with large-scale fixed batteries and distributed energy generation, leading to an energy transition.

• The costs of collecting, sequencing, and understanding digital biological data in multi-omics sequencing are plummeting, providing researchers with unprecedented access to DNA, RNA, protein, and digital health data. Access to AI-driven autonomous laboratories may reduce the costs of drug discovery, development, and trials.

🧐 Eleven Big Ideas Interpretation:

1️⃣ Accelerated Technology Integration

• Computing power is in the "second half of the chessboard"—a critical point of exponential growth.

• By 2030, computing power may reach the "end of the chessboard," driving unprecedented growth.

2️⃣ #AI Agents

• AI systems will be more deeply integrated into every economic sector.

• Smart devices will change how people consume, work, and entertain.

3️⃣ #BTC

• The number of Bitcoin holders is increasing, including public companies.

• Companies like MicroStrategy hold significant amounts of Bitcoin, constituting a substantial part of their market value.

• In an optimistic scenario, the price of #BTC could reach $1.5 million by 2030; in a neutral scenario, $710,000; and in a pessimistic scenario, $300,000.

4️⃣ Stablecoins

• #USDT (Tether) and #USDC (Circle) dominate the stablecoin market, accounting for 90% of total supply.

• Stablecoin issuers generate billions in revenue, becoming the most profitable business in the digital asset space.

5️⃣ Blockchain Expansion

• #Base has become the fastest-growing Ethereum Layer 2 blockchain.

• #Solana leads developer adoption, attracting 7,625 new developers in 2024.

6️⃣ Robotic Taxis

• Tesla and Waymo lead the autonomous driving race.

• By 2030, the number of robotic taxis could grow to about 50 million.

• Autonomous driving will significantly reduce travel costs from the current $1.10/mile to $0.25/mile.

7️⃣ Autonomous Logistics

• Autonomous driving will revolutionize logistics and delivery systems.

• Costs will decrease, and efficiency and reliability will improve.

8️⃣ Robotics

• Humanoid robots will particularly benefit small businesses.

• Home automation (like dishwashers) represents a $250 billion revenue opportunity in the U.S.

9️⃣ Energy

• Nuclear and renewable energy will serve as viable solutions.

• Tesla accounts for about 19% of global energy storage.

🔟 Reusable Rockets

• SpaceX has reduced launch costs.

• Supersonic flight could become a $35 billion market by 2030.

🔟 Multi-omics

• AI combined with single-cell genomics creates "virtual cells."

• AI-driven drug development can shorten time to market by nearly 40% (from 13 years to 8 years).

• Total drug costs could decrease fourfold (from $2.4 billion to $600 million).

📝 My Value Reflections and Opportunity Seizures as an Investor:

1️⃣ Blockchain and Digital Assets

The data on Bitcoin and stablecoins in the report impressed us. MicroStrategy's strategy of holding 446,400 Bitcoins (worth $41.78 billion, constituting 58.7% of its market value) and the decisions of mainstream companies like Tesla and Square to hold Bitcoin indicate a shift of Bitcoin from a speculative asset to a reserve asset. This major trend must be followed.

Additionally, I was surprised to learn that stablecoin issuer Tether achieved $5.2 billion in profits in the first half of 2024. This level of capital efficiency is hard to reach in traditional finance. As investors, we need to reassess the allocation of digital assets in our portfolios, especially regarding direct or indirect holdings of Bitcoin and participation in the stablecoin ecosystem.

However, risks still exist: regulatory uncertainty, security issues, and market volatility remain major concerns. Future strategy: the direct exposure to cryptocurrencies in the portfolio should be increased to 20%-30%, with an additional 10-15% for indirect exposure through public companies to achieve risk balance.

2️⃣ Autonomous Driving and the Robotics Economy

The report predicts that robotic taxis will achieve significant breakthroughs by 2025, with Tesla and Waymo leading. This trend will fundamentally change transportation economics, reducing costs from the current $1.10/mile to $0.25/mile. As an investor, I see not only the transformation of transportation companies but also the reconstruction of urban design and real estate value.

More enlightening is ARK's observation that Tesla's cost per mile is 30-40% lower than Waymo's, indicating that vertical integration strategies may be crucial in the autonomous driving field. This has led me to reassess the stocks of new energy vehicles in my portfolio. Many friends know that at the beginning of the year, we shifted from U.S. stocks to Hong Kong stocks, with the largest investment proportion being in new energy vehicle-related companies besides #AI. Here, we should reduce holdings in traditional automakers and increase investments in companies with integrated hardware and software capabilities, such as Xpeng and Xiaomi.

3️⃣ The Computing Power Revolution in Biotechnology

The multi-omics section of the report demonstrates how #AI can fundamentally change drug development, shortening the time from 13 years to 8 years and reducing costs from $2.4 billion to $600 million. This constitutes a paradigm shift for biotechnology investments, increasing the patent remaining period from 5 years to 9 years, enhancing drug value by 70-80%.

Biopharmaceuticals are also one of our major investment directions. We need to prioritize biotech companies that adopt "AI self-research laboratories" and "virtual cell" technologies, rather than just traditional large pharmaceutical companies. These new AI + biotechnology startups, being more agile, often bring about disruption and revolution. This aligns with ARK's view that technology platforms will change industry structures, not just improve efficiency.

🎯 Thoughts on Portfolio Reconstruction:

After reading this report, we realize the need to adjust our portfolio in three aspects:

• From vertical to horizontal: No longer invest based on traditional industry classifications, but rather based on technology platforms and integration points. For example, increase allocations to semiconductor and computing infrastructure that support multiple innovative platforms.

• From stable to exponential: To capture the exponential growth of the "second half of the chessboard," we should increase allocations to high-growth assets and adjust risk management strategies accordingly, shifting from single-company risk to systemic innovation risk management.

• From short-term to long-term: Many innovative trends require 5-10 years to fully unfold, such as autonomous driving and the multi-omics revolution. This necessitates longer investment cycles and higher volatility tolerance.

• Scalable opportunities: These innovative platforms are expected to enhance productivity, revolutionize industries, and create long-term investment opportunities.

• Integration trends: The five platforms are not isolated; their cross-application will generate greater value.

• Industry transformation: Traditional industries face significant changes, such as the impact of autonomous driving on transportation and AI on drug development.

• Time window: Many technologies will reach commercialization inflection points by 2025, especially in autonomous driving and AI applications.

• Regional differences: The U.S. and China lead in several fields, such as robotic taxis and blockchain development, where there are regional arbitrage opportunities and technological differences that can be well leveraged.

In conclusion, Cathie Wood's ARK report for 2025 not only provides technological insights but, more importantly, offers a framework for thinking about "how technology integration creates exponential growth opportunities." As GPs of Blue Ocean Capital, we need to understand and gain insights into current market trends and frontier opportunities promptly, and appropriately reflect these trends in our portfolios, balancing short-term risks with long-term returns.

As the report states, we are on the "edge of an unprecedented growth era." This is not only a golden age for investment but also a time that requires a new investment paradigm. In the face of such transformations, clinging to traditional investment philosophies will lead to missed opportunities, while blindly following trends will bring significant risks. As professional investors, our duty is to find a balance between the two, constructing a portfolio that captures exponential growth while effectively managing black swan risks. After all, in an era of exponential change, the greatest risk is not being aggressive but being conservative.

We have also translated this PDF report into a bilingual version for all our fans and partners to read for free; just complete a small task to receive it. Add our TG account: https://t.me/Rocky_Bltcoin, and a dedicated person will distribute it. Grateful 🙏 Let's grow and improve together!

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