Everyone is convinced that we've entered a digital assets bear market!

But we asked industry leaders, funds & traders what the bear thesis is, and there isn't a lot of substance.

In this week's "That's our Two Satoshis" via @arca, we debunk each one:

ar.ca/blog/crypto-ma…
Bear theses that we refute include (1-5):
1) CCP regime change is intent on killing digital assets
2)Massive regulatory pressure from the US
3) The Fed will be tapering soon and that is bad for risk assets
4) Retail momentum and interest is dead
5) Lack of institutional interest
Bear theses that we refute include (6-10)
6) ESG concerns
7) Tether, Celsius, BlockFi, Binance risk
8) Microstrategy is going to be a forced seller of Bitcoin
9) Grayscale (GBTC) unlocks are going to crush the market
10) Digital asset fundamentals are deteriorating
If there are other bear market theses that we missed, please let us know and we'll try to address those as well.

ar.ca/blog/crypto-ma…

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More from @jdorman81

15 Jun
Transparency update: We have periodically released public thoughts about select investments at @arca.

In the spirit of improving #transparency in this asset class, here is an update on these positions, and Arca's current involvement

$HXRO $CHZ $WNXM $EOS $SUSHI $LEO $GNO
1) $SUSHI

We loved it at $18.; we love it even more at $9. We have been large buyers over the past month, tripling our position with buys between $6 and $13, & we'll keep buying at depressed levels. We believe this is the cheapest asset in the market.

2) $WNXM / $NXM

We have not sold any -- and continue to add. At 1.07x book value, WNXM is basically a free call option on Nexus' growth, which we think will be massive. There's a reason 3 Wall Street firms have written on Nexus recently - it works.

Read 9 tweets
10 Jun
Hearing manymisconceptions about the $MSTR secured bond deal, what it means for $BTC, and many completely false narratives about "Will Saylor be forced to liquidate his BTC?"

Here's our interpretation of the bond covenants from the prospectus (h/t @MikeDershewitz )

Thread 👇
1) Collateral
Even though $MSTR says they intend to buy #Bitcoin, there is no promise or requirement to buy $BTC. This bond is a standard secured bond ($500MM) which is secured by all corp assets other than the first 92K BTC ($3.4bn @$37K) already purchased - that was carved out
The $500MM raised MAY be used to buy $BTC (which $MSTR said they will do), but the investing public should hold them to it if they don't. They are under no obligation to buy #Bitcoin.
Read 12 tweets
8 Jun
Every sell-off ends when a catalyst emerges... easy to find catalysts for things like $ETH (EIP-1559), $DOT (parachain launch) but what will be the likely catalyst for $BTC?

Here are 2 possibilities:
1) People constantly confuse "institutional buyers" w/ "fast money traders"

Ruffer, Blackrock, Minerd, etc - traders. They entered (unemotionally) when $BTC was cheap & underlevered ahead of catalysts (4Q20) & exited when expensive, overlevered, & lost its catalysts (2Q21)
But these traders made a lot of money, & will return (with others) when $BTC gets cheap again... when
- leverage is flushed (✅)
- fear gets too high (✅)
- fiscal/monetary stimulus continues unabated

Nowhere else to go with rates heading back to 0% & the USD going down.
Read 5 tweets
6 Jun
This tweet followed a 40 min call Joe had w/ @DavidNage & me

We had a rational discussion; same as we have daily w/ smart, successful investors who deploy millions into our funds.

Joe is not dumber than them; he’s just committed to a successful antagonistic anti-crypto schtick
I said tokens turn customers into owners & incentivizes USAGE of a protocol & product, not that it incentivizes buyers of a token. Thus, not a get rich quick MLM. It is a way to attract & retain customers. MLMs favor the rich sellers; pass thru tokens favor the everyday customers
If a restaurant gave out free food for a month, it would attract customers, but be a failed biz model unless the food & service was so good that they came back after it was no longer free.

Tokens create step 1; step 2 is up to the project, & many are now succeeding at retention
Read 5 tweets
23 May
Lots of people asking for my opinion right now... here's a quick and dirty thread 👇
First, think about what caused the rally since October 2020:

1) Low rates / low dollar

-- still very much in tact even though there are taper talks and inflationary data, rates and the dollar still have not reacted, which is still very bullish for risk assets
2) Inst money coming into the market

-- Inst money doesn't come faster or slower based on price moves. Those trying to deploy will still deploy, and they are. Though $GBTC & $COIN may have been leading indicators, as downward px moves show inst money was already slowing
Read 15 tweets
14 May
We believe $SUSHI is now the most undervalued token in digital assets.

A thread on valuation, upcoming catalysts, and why the recent downward price action will be short-lived Down pointing backhand index 👇
2/ $SUSHI has underperformed both $UNI and the broader DEX market since the beginning of the year.

This is most apparent with the 50% peak-to-trough decline in March and April (still down ~30% from ATH’s)
3/ Why? 3 Overhangs:

1) rolling 6-mo vesting unlock from initial Sushi yield farming
2) PancakeSwap growth
3) Uniswap V3 hype

Let's break each of these down -- none of which have any actual impact on $SUSHI valuation and its core business.
Read 23 tweets

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