1/ INSIDE THE EVENT HORIZON with @MimesisCapital


2/ A common “knock” on Bitcoin is that it is “too volatile”.

However, volatility isn’t necessarily a bad thing. In fact, volatility creates opportunity.
3/ Volatility and return can be assessed using something called the Sharpe Ratio, a risk adjusted return. The Sharpe ratio divides the asset return by the risk / volatility over a 4 year HODL period.
4/ Bitcoin’s Sharpe ratio has been higher than every other asset class.

This is one of Wall Street’s favorite financial metrics screaming “buy bitcoin”, as it shows that the return of holding bitcoin more than compensates you for the historical downside volatility.
5/ But why does bitcoin have these large sudden moves down in price? What is causing this massive correction in such little time?
6/ Unlike equities (stocks), which tend to be traded aggressively on earnings days (days when the performance and future guidance of the company fundamentally changes), bitcoin tends to trade aggressively on seemingly random days.
7/ Most large sudden moves down are simply driven by excess leverage.

8/ As @WClementeIII explained, it is similar to a Jenga tower built on a fragile base.

If funding rates and the futures contango are extremely high without significant buying pressure in the spot market, the Jenga tower only needs a little push before it crashes down.
9/ Ugly feedback loop

1. Price falls.
2. Highly leveraged longs get liquidated.
3. Price falls further.
4. Less leveraged longs get liquidated.
5. Traders see falling prices and jump on the trend.
6. Price falls.
7. Repeat until the fragility of systemic leverage is eliminated.
10/ This imbalance, driven by excessive leverage, results in volatility. This volatility results in coins getting transferred from weak hands to strong hands that understand bitcoin. After weak hands sell out, price must adjust to the new equilibrium.
11/ A new base of strong holders is built on a more sustainable price level and then bitcoin’s parabolic bull run continues as it has for more than a decade.

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More from @IIICapital

17 Apr
1/ INSIDE THE EVENT HORIZON with @MimesisCapital


2/ The 60-40 portfolio is the basic idea that passive investors looking to efficiently transfer wealth through time should diversify their assets into 60% stocks and 40% bonds.

#Bitcoin is killing the 60-40 portfolio.
3/ Why shift out of bonds into Bitcoin?

First, Bitcoin is the world’s hardest monetary good. It’s the only asset in the universe with no counterparty risk and no dilution risk. Bitcoin is the World’s Safest Asset.
Read 10 tweets
6 Apr
1/ The April 14th @coinbase direct listing could ignite the next phase of the 2021 #Bitcoin bull run.
2/ Coinbase is set to float about 115M shares. A little less than half the total shares outstanding.

3/ The pre direct listing price per share is currently trading on @FTX_Official. It's just shy of $500 a share.

This would be a $125B valuation. $57.5B of which will be publicly traded on the day of the direct listing.
Read 8 tweets
4 Mar
1/ My Thoughts on Macro

Over the last few weeks there has been lots of discussion around things like YCC, real rates, repo market, steepening yield curve, etc. IMO, Many people are getting stuck in the weeds and missing the big picture.
2/ Neither you or me can accurately predict short term market movements over days, weeks, or even months. However, we can accurately predict long term trends.

In today’s world, money is debt. Debt is everywhere and everyone is incentivized to get into as much debt as possible.
3/ We must continue to grow the amount of debt otherwise, if the total debt (money) begins shrinking, we enter into a sharp deflationary spiral.
Read 8 tweets
20 Feb
1/ How to Live Off Your Bitcoin 101

1. Post BTC as collateral for USD loan from @unchainedcap
2. Buy Bitcoin and short futures on @binance
3. Collect spread (currently 43% annualized)
4. Pay interest 11%
5. Earn 32%.
2/ Note these spreads can change quickly.

If Bitcoin does drop rapidly you will need to collateralize your loan. But as Bitcoin is dropping the futures spread is also likely dropping. Meaning you can close out your carry trade early and make $ profit.
3/ Since Bitcoin dropped from where you originally took your loan, you probably ended up with more Bitcoin than you started with, and you can use that to collateralize your loan.

Still a win.
Read 6 tweets
19 Feb
1/ INSIDE THE EVENT HORIZON with @MimesisCapital


2/ $1M BTC will only be the beginning.

The invention of absolute scarcity has created a massive blackhole right in the middle of the global financial system. Its gravity is so strong and so powerful that measuring Bitcoin’s “market cap” will soon not be logical or useful.
3/ First, Let’s compare two vastly different monetary technologies.

One is government fiat currency (USD) and the other is Bitcoin.
Read 16 tweets
9 Jan
Clearly a blow off top bubble here. Would not buy #Bitcoin at ≈ 2x ATH.

May 2017

1 BTC = $1,791
Clearly a blow off top bubble here. Would not buy #Bitcoin at ≈ 2x ATH.

March 2013

1 BTC = $43
Clearly a blow off top bubble here. Would not buy #Bitcoin at ≈ 2x ATH.

April 2011

1 BTC = $1.82
Read 6 tweets

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