Crypto thread

We’re almost at the point in the story where everyone starts piling into alts and I get filthy rich

Raoul Pal Tweet: 

“I'm about to present The World's Best Trade (aka Bitcoin) to 150 European hedge funds and asset managers. Wish me luck.” 

He picked a good day for his presentation eh? 

https://twitter.com/raoulgmi/status/1339219909356695552?s=21

A hedge fund specializing in volatility bets has emerged as one of the largest investors in Bitcoin after quietly buying more than $600 million in cryptocurrencies and joining forces with Alan Howard, the co-founder of Brevan Howard Asset Management.

Eric Peters, chief executive officer of One River Asset Management, said in an interview he set up a new company to seize on the growing interest in cryptocurrencies among institutional investors. In addition to its initial purchases, One River Digital Asset Management has commitments that will bring its holdings of Bitcoin and Ether to about $1 billion as of early 2021, he said.

https://www.bloomberg.com/news/articles/2020-12-16/bitcoin-whale-surfaces-with-1-billion-and-alan-howard-s-backing

Quotes from the Bloomberg article 

“There is going to be a generational allocation to this new asset class,” Peters said. “The flows have only just begun.”

“Covid-19 provided the ultimate catalyst for that transition,” Peters said. “This is the most interesting macro trade I’ve seen in my career.”

“While gold also stands to appreciate in a world of debased currencies and inflationary fears, Peters thinks Bitcoin and Ether prices can far outpace that rise.” 

1 Bitcoin = $21,278.00 

Detox, I remember when you were getting slandered now you looking like the smartest guy on covers 

Leather pants for everyone 

There are cryptos with market caps less than $50m right now that will be $1b market caps within the next year.

1 Bitcoin = $23,170 

Doge pumping usually signals the start of alt season 

Bitcoin 25k today, maybe more? 

Bitcoin: $0.4T

Gold: $10T

Bond market: $100T

Bitcoin isn’t a bubble, it’s the pin. 

Few understand this. 

A few people starting to call for BTC to retest $14k before mega moon to $100k. 

Id be surprised if everyone got another shot at buying there when whales have been buying big stacks much higher. 

We’ll see. 

Elon with a bitcoin meme 

Michael Saylor replies: 

“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC.  Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.” 

https://twitter.com/elonmusk/status/1340581313406001153?s=21

Here’s a thread on Twitter that I found interesting. Maybe Wallstreetcappers could discuss it a bit.

This question was asked:

Out of interest, why use Greyscale as opposed to buying direct?

This was the response: 

The @grayscale vehicles provide an amazing way to get exposure at a fraction of the publicly traded price of these vehicles.

Let's start with $LTC.  

The $LTCN NAV is $9.97.  This is where LP's get to purchase.

The stock is trading at $329.48

If you put $100,000 into the trust, you get back close to 10k shares of $LTCN.

So immediately your $100k is worth $3.3m approx.  Not a bad deal.

BUT, you have to hold it for a year.  (the risk)

BUT, how big is that risk?  How low would $LTCN have to go to lose money.

You don't have to be a genius to understand that the price of $LTCN would have to drop by 97% or so in order for you to lose.  Those are my kind of odds.

Keeping this in mind, if $LTCN went down by 80% in a year, and $LTCN was $65, you would STILL make over 600% on your money

I am not going to say this is truly a case where the rich can get richer, but it certainly favors the accredited investor in a huge way.

You can repeat this with $BCH ($BCHG), $XLM, $XRP, $BTC, $ETH, etc.

Now, history tells us that the premium decreases over time as LP's..

There’s more to thread so I’ll just leave the link here https://twitter.com/shardib2/status/1340661415493963781?s=21

Elon replies to Michael Saylor: 

“Are such large transactions even possible?” 

Michael Saylor replies to Elon: 

“Yes. I have purchased over $1.3 billion in #BTC in past months & would be happy to share my playbook with you offline - from one rocket scientist to another.” 

For BTC to get to $100,000+ this cycle and then $1,000,000+ in the future it will need large corporations and eventually countries to start buying BTC with their reserves. 

I don’t think Elon will buy BTC. But I do think these type of public interactions are a good start. 

So who gets to buy at NAV and how does one go about doing that? I see a very illiquid shallow traded fund but no idea how someone or anyone can buy at NAV, then just turn around and sell at inflated market price. When something smells off it usually is off and with extreme cause.

I don’t know anything about that stuff. You think it’s stupid or worth looking into? 

Here is what I took from that twitter exchange, there are many risks including competition, locking up your dough for whatever term the company requires (it seems what they say it is a year lockup) and there could be an event like we have seen in leveraged products that say a few people try to liquidate then the whole complex could fall apart and the thing goes to zero.

I dont know how the product works or even how anyone could buy at NAV...it could be a min net investment requirement or a corporate structure I dont know.

It trades like zero and I dont know what the cause of the move is or how easily it could reverse. There are no free lunches so the gap between NAV and market must have a solid explanation or people would flock to the free money and the gap between NAV and fair market would narrow.

Makes you wonder if this is mega leveraged and if so thats not something positive. A leveraged position can unwind and implode on a small drop in the underlying asset.