Kyle Soska on the Hyperliquid TGE buy, Bitcoin's quantum overhang, and why Zcash can out-upgrade it

Bull case: Kyle Soska says crypto has "decidedly inflected"

Kyle Soska, who runs Rayo Capital with Flood, opened by saying he believes cycle lows are in for majors like Bitcoin and ETH, and that the recent concentration of capital into Bitcoin, HYPE, Zcash, Lighter and Near is not yet a sign of an unhealthy, crowded market. He argued the last 12 months were unusually "PvP" compared to other risk assets, and that the market is only now entering an easier, more PvE stretch.

Soska traced his path from mining Bitcoin in 2011 and studying Silk Road economies academically at Carnegie Mellon, to co-authoring a 2021 paper on BitMEX with Alex Kacherginsky, which he called his "perpetual futures moment." That research led him to Flood, a well-known BitMEX trader, and eventually to Rayo Capital, where the two have run prop capital together since roughly 2021, splitting the book and answering to no outside investors.

He described a broader thesis that crypto's early cycles rewarded "left curve" belief without requiring conviction to sell, but argued the market is maturing as the pool of new entrants shrinks.

"2017 to 2025 was whether you can be right or make money... 2026 and onwards, being right will make you money" — Kyle Soska

The Hyperliquid trade: buying "all" of HYPE on TGE night

Soska said he and Flood had built a multi-month thesis around Hyperliquid well before its token launch, having moved their own trading there, accumulated the project's perp token, and participated in its points program. On the night of the TGE, Soska said he went to sleep after watching the first few hours of price action, only to wake up to messages from Flood describing an impulsive, high-conviction buy.

"Dude, I just I I clicked and I kept clicking and I kept clicking. Like I it just it just felt right. I bought it all." — Flood, as recounted by Kyle Soska

Soska said the position never felt uncomfortable to hold, even through volatile periods like what he called "the jelly jelly days," because conviction in the team's competence remained high.

On where HYPE goes from here, Soska said the market has largely converged on the bull thesis already, and that further big upside depends on Hyperliquid converting traditional options traders into perps traders — an outcome he compared to Binance's roughly 50 million KYC perps users who overwhelmingly prefer perps to options by his account of the ratio. He said a 10% conversion rate from traditional options flow would be "massive" for the space, but conceded this is a bet on something that has not yet happened.

Bitcoin's quantum overhang and why Soska thinks it costs half the price

Soska said Bitcoin's underperformance against gold stems largely from a growing "quantum" overhang: large holders, including parties disclosed by Galaxy as facilitating sales for clients owning around 80,000 bitcoins, are increasingly uncomfortable holding an asset with what he characterized as a small but multi-year risk of a catastrophic cryptographic break.

"I think that the price is probably half of what it would be had this overhang of like something quantum not existed." — Kyle Soska

He explained that a quantum-safe upgrade is technically known today but would slow an already conservative chain further, and that several proposed smaller post-quantum signature schemes have had "fatal flaws" found in them over the past four or five months. He compared the political risk of implementing such an upgrade to the 2017–2018 Bitcoin Cash "block wars," predicting a similarly contentious fight once a viable scheme gains support — after which he expects Bitcoin to "materially reprice higher."

By contrast, he argued Zcash can move faster because its holders can vote through major protocol changes, such as a recent vote cutting block times toward 25 seconds, without the drawn-out community conflict he says plagues Bitcoin upgrade attempts. He was critical, though, of any Zcash bull case framed purely as "insurance against Bitcoin," saying a token's case shouldn't rest on another token's name.

Why Rayo Capital sold all of its ETH in 48 hours

Soska described listening to an EigenLayer-related Twitter Spaces around the protocol's roughly $11-12 billion TVL peak, featuring a lower-profile EigenLayer Foundation staffer responsible for managing relationships with AVS projects.

"Guys, I don't think you understand. Like, I don't know where the yield is going to come from to pay these guys... I got 11 billion I got to provide yield for. I don't know where it's going to come from. Like I'm scared." — a guest, quoting the EigenLayer Foundation speaker

Soska said this candid admission, from someone without media training, convinced him the restaking narrative was near its ceiling despite large holders like Justin Sun and GCR reportedly being heavily positioned in the ecosystem. He called Flood immediately, and said the two exited all ETH exposure within 48 hours, close to what he estimated was $3,800, though he said they did not "top tick" the move.

What makes a good trader, and the TRB trade he regrets not taking

Asked whether great traders are born or made, Soska said he believes trading requires innate judgment and risk tolerance, likening it to being the person who identifies a hit song or trend before others do. He said his own weakness was the opposite: strong at generating ideas but historically too risk-averse to size into them, a trait he says Flood complements by being, in Soska's words, an unusually gifted buyer.

He cited a 2023 trade in TRB, a low-market-cap token he determined had been cornered by a single actor who controlled roughly 80% of supply via wallets linked to a "tier 2/3" exchange he associated with Garrett Jin. Soska said he correctly predicted the token would be pumped from around $120 to roughly $600 before crashing, but didn't take the trade in appropriate size out of fear of losing money, calling it a trade he should have "banked" but didn't.

On shorting generally, Soska said he and Flood short regularly but only assets whose supply dynamics they understand well, citing Grass Token as an example where shorts got squeezed because supply was tighter than the market assumed. He said speculative shorting works best spread across diversified baskets rather than single large bets.

Managing tilt, selling discipline, and reading market "vibes"

Soska said he does not take breaks from markets when he feels out of rhythm; instead he cuts position sizing to roughly 5% of normal while staying engaged, scaling back up once he feels "hot" again. He described selling as his particular strength relative to Flood, pointing to a period around Hyperliquid's USDH ticker auction — when Paxos, Athena and PayPal all publicly courted the protocol — as a moment he grew cautious because sentiment felt "too nice" and "three-three."

He argued that vibes and narrative now matter more than fundamentals across markets broadly, not just in crypto, and that current crypto sentiment is "pretty good" among crypto-native participants but has not yet drawn significant new outside capital, noting that during the summer "meme stocks" and AI names had pulled attention away from Bitcoin entirely.

Asked for advice, Soska said people without large portfolios should not quit their jobs to trade full time, describing his own experience finishing a PhD while trading, and suggested most people are better served treating trading as a part-time pursuit layered on top of stable income.

"If the world isn't screaming to make your product legal, it's just not that good." — Kyle Soska