Tweet

DK

3 Jan, 11 tweets, 8 min read

The #Crypto Quality Arb Portfolio - Experiment for 2021

I set up an account with 11x leverage, invested in 14 Longs I consider to be higher quality vs 11 Shorts I do not consider to be such quality

THIS IS AN EXPERIMENT. IT IS NOT ADVICE.

#altcoins #bitcoin #ftx #qualityarb

The investable universe is PERP futures listed on FTX and it goes without saying that it is only crypto (ie I will ignore any stock futures) and only altcoins

The experiment is set up as a classic 120% Long, 100% short book (ie it has a theoretical market exposure of just 20%).

It is meant to be a stable experiment and I will update the positions (and re-size them) once a month. I expect very little movement in individual names. I want to see if a "classic" strategy where investors pick higher quality to go long and lower to go short works in #crypto.

In theory, with little net market exposure, this book should be able to withstand #crypto crashes and it is extremely unlikely to outperform a buy and hold startegy in a strong bull market. In stocks one might expect 5-15% pa from such a book, but regardless of market direction.

No expectations for this book. It is strictly an experiment. It is absolutely not financial advice and the only reason I publish the results here is that it is the only way to make sure it is a true reflection of the idea.

This book could well be liquidated due to leverage.

I will be posting monthly PnL screenshots from the website in this thread. If you want to follow it, just bookmark it. The experiment ends Dec 31st 2021 or with a liquidation event.

#crypto #altcoins #FTX #Uniswap #bitcoin #ethereum #qualityarb

(Note: the screenshot above says 125% long / 75% short, it is actually - as described in the text - 120% long, 100% short)

Just day 1, but a nice start. +23.4% currently. Start was $10k. Think I may have to rebalance more frequently than I thought though given this is #crypto.

#Qualityarb

Still early, but I like that the book has not completely disintegrated in this $BTC price nuke despite the small net long bias. That is the idea. We'll see how it keeps going.

Two changes: Replaced $SOL on Long side with $MTA (simply don't want the book to be driven by any unlock discussions, not the point) and added $LEO on short side. No idea how I missed that.

A lot more movement in #crypto than in traditional markets, so I had to rebalance the book already. Added $ETC on short side. So far so good, but only 3 days into the experiment... #qualityarb #altcoins #FTX #uniswap #Defi

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More from @dkcrypto13

DK

@dkcrypto13

2 Jan

Basically going to bed now so I can’t make this a long thread, but re #bitcoin $BTC price here (32k):

- Funding rates are apesh1t crazy
- Futures heavily contango
- #tether price > spotprice in real $ (implying harder for Paolo to keep pumping)
- Orderbooks quite empty
...

- Price action looks similar to a blow off top (short capitulation)
- Bubble roof target almost met (its 5% off the current ATH)
- all the action took place on holidays (lower volume)
...

In summary - this could very well have been the local top that leads to one of $BTC s patented 30% reversals. I still think $23-24k will be tested, but maybe $27.8k is enough. I watch funding rates mostly to see if we have kicked excess leverage or not. Invalidation: new ATH

Read 5 tweets

DK

@dkcrypto13

29 Dec 20

1/ A #bitcoin ETF will be launched in 2021
2/ $BTC will keep rising in price till the Fed stops their current round of quantitative easing, but IF/when it stops, people will be surprised at how negative it will be for any kind of assets despite a roaring economy

3/ Security standards for #token become more aligned globally and raising money via token that have equity-like rights will become a generally accepted way to raise early capital for companies
4/ $ETH will mark a new ATH in price, but scalability will become more of an issue

5/ #Binance, #Bitfinex, #Tether or #Bitmex will not survive 2021
6/ $UNI will be investigated as a security - the outcome is extremely hard to predict, but volumes on #uniswap won't suffer
7/ #Ripple will be convicted in court for securities fraud

Read 6 tweets

DK

@dkcrypto13

27 Dec 20

Thoughts on #bitcoin price here in a thread

TL;DR: $BTC is caught between a tug of war of market manipulation by #tether, pushing price on low volume on one hand and undeniable fundamental asset price inflation driven by the Fed’s printing on the other.

1/ $BTC is up 22% in 5 days on ever falling, low volume in holiday trading. During this time it has defied every sensible signal. Leveraged funding is unsustainably high, futures are as far in contango as I can remember.

2/ #tether has printed $400m during the holidays, implying that either huge (and I mean HUGE) institutional investors have wired real Dollars over the period when they aren’t in the office or, as we all know it to be true: they are printing freely out of thin air.

Read 14 tweets

DK

@dkcrypto13

23 Dec 20

(Another) thread about $XRP, #Ripple & why what they did was so despicable. It's not about them getting a fee & walking free, nor about whether the token will go up or down in value. It's about people understanding what this organization did to them. #crypto #bitcoin #XRP

1 - #Ripple sold something to the public that the public could not get information about. There are regulations that ensure that investors can understand what is happening with their funds and what they are investing in.

2 – Due to the information vacuum, people who bought $XRP could not know for sure what insiders do with their holdings. There was no way to see that the only thing they did was sell.

Read 14 tweets

DK

@dkcrypto13

22 Dec 20

Yes, I am very much going to join the “I told you so chorus” here.

#Ripple is the biggest scam in the world IMO and their useless token $XRP absolutely is a security. I have fought the Ripple army in my articles since 2017.

Well done SEC. Hope its a strong case. Don’t settle.

And yes that means #tether is only the second biggest scam (because what could be bigger than printing $30bn and DIRECTLY giving it to yourself like XRP did?).

But 👏 regulators 👏 will 👏 come 👏for 👏 tether 👏too

And don’t let brainless $XRP buddies make you believe that this is an ‘attack on #crypto’. The SEC is attacking a company that built a centralized database nobody needs and then created securities if which it kept 80% to finance their business. #ripple then dumped on retail.

Read 5 tweets

DK

@dkcrypto13

21 Dec 20

#Covid19 #coronavirus #corona

To our politicians: Rapid testing exists since June 2020. Had we produced them in a state-mandated manner & done an explanation of how to use them on national TV, plus subsidized the purchase, we could have a #lockdown free, safe life...

... where you can buy a rapid test at every little shop around the corner for 2-3 EUR (that is the production cost) and you can go about your life. These tests are not hard to use, they do NOT require a doctor to use them and while they are "only" 90-95% accurate...

... PCR is at 97% and I'll remind you the vaccine is going to be around 90% if we are really lucky. And yet, the only thing we do is sit around and wait for the vaccine and lock out flights from other countries, when the likelihood the mutated virus is already in Europe...

Read 13 tweets

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