Anyone want to buy $BTC at a 47% discount to current prices? Here's how you can do it.

I can't believe I'm saying this, but $EOS might actually be the best risk/reward in digital assets right now due to their massive #Bitcoin holdings.

Thread time 👇
First, let's talk risk/reward. Over the past 2 years, $EOS is the only well-known token other than $XRP that is not higher. In fact, it has underperformed by a LOT.

Even other zombie projects are up 300-1000%

That's a nice start for an investment -- low downside, relatively
Next, the math:

Block One owns 140,000 $BTC. At $2.77, the market cap of $EOS is $2.6 bn, which is only 47% of the value of their BTC holdings.

That means by buying $EOS, you are actually buying $BTC at $18,771. Huge discount.

The question is "can you unlock this value"?
Why does book value matter? Here's a good explanatory thread:



$WNXM showed how this works. WNXM traded below BV temporarily, until investors realized the value of the underlying ETH. These are sweet setups and don't last long.

Counter-argument: Generating an ROI from BV is basically a bet on what management will do with that capital, & of course the EOS & Block One teams have done nothing to instill confidence right?...



...but that's precisely why this is so interesting.
If you think the herd of institutional investors getting into $BTC was fast, wait until activist investors like @BillAckman @DanielSLoeb1 or Elliott Mgmt find out that you can extract $2.8 Bn from $EOS.

You're crazy if you don't think there will be court cases over $2.8 bn.
Don't think it's possible? See $GNO

GNO used to trade at 30% of BV and there was no link between Gnosis' balance sheet & $GNO.

After @arca pressured Gnosis to convert its balance sheet into a DAO, GNO now trades at 100% of BV!

GNO is now fully backed!

At this point, either EOS & @BrendanBlumer need to

1) create value for $EOS holders ASAP
2) Return the capital
3) Expect huge lawsuits

Any 1 of those 3 options will unlock this value, and close the gap between EOS' market cap and the value of the $BTC on their balance sheet.
What about Dan Larimer leaving? First, what value has Larimer created for anyone other than himself? If anything, this is good for $EOS holders -- now Block One may feel pressure to actually deliver value back to EOS token holders.

coindesk.com/cto-dan-larime…
You don't even need activism. Both $MSTR & $GLXY stock trade at ~2-4x book value despite not generating any meaningful profits outside of $BTC holdings.

Equity investors love cheap assets with potential upside - token investors should too (and will)

bitcointreasuries.org
In general, investing in layer 1 tokens is like buying a call option on future network growth. Most will fail, only one has succeeded $ETH

But I'd rather own $EOS as a free call option rather than pay an incredibly high premium for overvalued ghost protocols $TRX $ADA $XTZ $XLM
Distressed investments have hair on them. This is what makes them profitable (i.e. buying $LEO's new issue at $1, or buying $CEL under $1). The most hated tokens often accrue the most economic value.

"Would you rather be right or make money"?

Few. @DegenSpartan @cmsholdings
Investing is all about repeatable processes & historical precedent.

We've seen this before. From DigixDAO, $GNO, $WNXM to crypto tracking stocks like $MSTR $GLXY -- book value matters.

I'd be shocked if $EOS doesn't end up back at book value eventually (BV = $5.77 right now)

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More from @jdorman81

7 Jan
Here's the problem. #DeFi can be valued based on cash flows. $BTC $ETH & layer 1s can not be. When something can be valued, it also creates a theoretical ceiling. That's why VCs often tell startups not to generate revenue - b/c once you have revenue, the valuation model changes.
That's why 80% of the Top 25 digital assets by market cap are such a joke, dominated by Layer 1s and cryptocurrencies with almost no chance of success - because this industry was founded by a VC mentality of "huge upside, low probability of success, but no way to prove me wrong"
$ETH and $BTC have already proven to be successful -- whether they are cheap or expensive is hard to know, but they have undoubtedly succeeded. Many DeFi tokens are definitely cheap, but price gains are somewhat limited by current revenues or multiples on future revenues.
Read 4 tweets
29 Dec 20
Anyone like great risk/reward setups w/ high upside, low downside & tangible floor value? @NexusMutual $NXM $WNXM

WNXM now trades at a NEGATIVE net market cap. So how did NXM go negative?

A lesson in book value & optionality 👇
2) First, h/t to @DegenSpartan who nailed the "sell call". Investors who focused on $NXM price & the MCR completely misunderstood how Nexus & the NXM token works (myself included).

But the short thesis is completely over and it's now an "all-in buy"

Nexus Mutual, like all insurance companies, has to keep a certain amount of capital in their pool to pay out future claims. What they do with this capital is how insurance companies make money.

Profits = Yield on float + premiums paid > claims paid & inv losses

Simple business
Read 6 tweets
30 Nov 20
"That's Our Two Satoshis" is out! This week, we take a look at the institutional adoption of digital assets

ar.ca/blog/crypto-ma…
Was it Paul Revere or Satoshi Nakamoto himself who said "The Institutions are Coming! The Institutions are Coming!"

Regardless, they are currently playing stickball in the parking lot while the pros are playing under the lights of Yankee Stadium.

ar.ca/blog/crypto-ma…
The growth in #Bitcoin products like the CME futures and Grayscale's trusts shows that institutions are here already, but these products have limitations, including not being open during volatile trading hours. This manifested itself during Thanksgiving.

ar.ca/blog/crypto-ma…
Read 4 tweets
20 Nov 20
Five random Digital Asset and #Bitcoin thoughts heading into the weekend

👇
1) Actively managed hedge funds and passive indexes built around high allocations to $BTC have a very short shelf-life. Investors now have the knowledge & means to buy $BTC themselves. Very soon, investors will specifically seek out digital asset HF strategies that own $0 in BTC.
2) Decentralized governance is less about ideology or risk transfer, & more about capitalism. Historically, there has been nothing in digital assets worth governing, but now, as #DeFi protocols are generating real revenues, there is something worth fighting over.
Read 6 tweets
17 Nov 20
Love the "Uniswap liquidity plunges" clickbait.

Facts: 4 Uniswap pools had more liquidity than needed to facilitate trading, & the excess liquidity left once $UNI farming ended. This doesn't affect volumes. TVL is pointless for Uniswap when there is more capital than needed.👇
Uniswap's TVL started going up at the end of August, & has now "crashed" back down to where it was 3 months ago.

But Uniswap's volumes peaked BEFORE TVL even increased, & volumes went down while TVL went up.

Volumes & TVL are not correlated when there is excess capital.
Yes, LPs are critical to Uniswap's success, but go look at CoinFlex if you think incentivizing market makers is the secret to success (hint, it isn't). You need customers too, and Uniswap's customers are much stickier than the LPs.

As long as customers show up, LPs will stay.
Read 5 tweets
30 Oct 20
A thread on Uniswap $UNI

The rationale for owning $ETH as an investment is that Ethereum is a clear market leader, w/ strong growth/usage, & tangible fee generation even though none of this value accrues to ETH token holders yet.

This is actually the same bull case for $UNI 👇
Uniswap is the clear market leader in DEX trading. Like "ETH vs smart contract protocols", there's not even a close second to $UNI in DEX Trading (courtesy of @DuneAnalytics)
With $ETH, EIP-1559 & ETH 2.0 are constantly in "the future", but the $UNI "Fee Switch" is happening w/ near certainty Feb 16, 2021 (180 days after governance began).

$UNI will then join a small list of tokens like $HXRO $MKR $FTT $BNB that accrue real value from earnings
Read 15 tweets

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