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Jeff Dorman, CFA Profile picture
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Jun 21 • 5 tweets • 2 min read
A historically bad week for digital assets, and the rest of global markets, led to me spinning up 11 random thoughts about this bear market

ar.ca/blog/11-random…

#ThatsOurTwoSatoshis
1) Why $BTC & $ETH are underperforming

2) #DeFi is kicking the crap out of #CeFi

3) #DeFi is being held back by lack of adoption of stablecoins, not DeFi itself

4) USDC = USDT; BlockFi = Celsius; Grayscale = Lido - Stop pretending they are different
5) Tether and Circle are making a fortune right now from higher rates

6) Transparency vs non-transparency -- pros and cons

7) The grave-dancing, negative clickbait bias is very lopsided -- lots of stories on forced sellers, no stories on willing buyers
8) Cash - there is a TON of it. Stables as % of market cap is all-time high. When the buying starts, there is a small window to jump through

9) "Too big to fail" -- big players in this space are economically incentivized to help smaller players... see SBF's recent actions
10) This market is not dying any more than FAANG stocks have died historically

11) Yes, the forced selling will stop, sooner than you think

Bonus: Lots of known overhangs are gone (LUNA, UST, Celsius, leverage)

ar.ca/blog/11-random…

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More from @jdorman81

Jeff Dorman, CFA Profile picture
Jun 22
Wait til yield farmers & stETH holders learn about bonds:

$MSTR, $COIN & $GLXY bonds now yielding more than anything in #DeFi:

1) MSTR: 0% converts due '27 @ $47 = 17% yield + very OTM call option attached

MSTR has $2.4 bn of debt vs $2.6 bn worth of BTC on their balance sheet
2) The most egregious: $GLXY 3% converts due '26 @ 68 = 12.75% yield + OTM Call option

GLXY has $500mm of debt versus $845mm of cash and $2.2 bn of digital assets on their balance sheet

Equity ($1.7 bn) trades well below book value (~$3 bn) and debt is covered 6x by assets!
3) $COIN 3.375% unsecured bonds due '28 @ $65 = 11.25% yield

COIN 0.5% converts due '26 @ 61 = 14% yield + very OTM call option

COIN has $4bn of debt covered by $6 bn of cash + $750mm of investments (marked at cost) at Coinbase Ventures

NEGATIVE NET DEBT!
Read 4 tweets
Jeff Dorman, CFA Profile picture
Apr 19
Three reasons why we believe $ATOM is one of the most undervalued tokens in the market

a thread 👇 courtesy of @Bodhi_Pinkner
Reason #1: ATOM is undervalued relative to itself

The IBC ecosystem is exhibiting over 68mm monthly transactions throughout the $74bn of protocols built on it. Yet, $ATOM and the Cosmos Hub, the ecosystem’s nuclei, are worth only $7bn

Hmm...
In the words of @CryptoHayes

"I then backed up the truck into $ETH when I saw a chart that showed the total value of dApps built on Ethereum was greater than the market value of ETH itself.”

Seems pretty pertinent to $ATOM now too

cryptohayes.medium.com/five-ducking-d…
Read 10 tweets
Jeff Dorman, CFA Profile picture
Feb 27
Strange price action today. Digital asset prices didn't react at all to Russian bank sanctions overnight until FX markets opened this afternoon, leading to x-asset quant/macro guys selling everything.

Liquid crypto markets were open all weekend, but "tail wagging the dog" here
Most have no idea (including me) and are jumping on the narrative that they want to play out.

If you’re short / in cash - your stance is “sell everything it’s all going lower”.

If you’re long - your stance is "money has to go somewhere --> likely into the US, gold, & $BTC"
This does not feel like a Lehman-moment to me, though I've seen it referred to as that.

With Lehman, it was immediately known that every bank was in trouble and no one knew who had exposure to who or what.

Today, most agree with who has exposure to this risk (Russia/Europe)
Read 6 tweets
Jeff Dorman, CFA Profile picture
Feb 24
1/ Arca has posted a governance proposal to add much-needed utility to $ANC. Anchor, Terra, & UST are some of the fastest-growing protocols, but ANC has underperformed the broader sector. ANC lacks utility and is heavily incentivizing $Luna rather than $ANC

Thread below
2/ ANC’s TVL has increased to $11.3Bn since inception less than a year ago while its token price has fallen 16%. MeanwhileTerra (Luna) has increased by 233%. (ANC underperformed by 249%)
3/ Investors, the community, and Anchor’s leadership have acknowledged the current tokenomics structure of the ANC token is broken, this has led to fruitful proposals and discussions but more needs to be done to ensure value creation for ANC and sustainability.
Read 11 tweets
Jeff Dorman, CFA Profile picture
Feb 15
The easiest part of investing is finding a good idea.

The hardest part of investing is finding the best pure play way to express that idea

A short thread on a few ideas and how we're expressing them 👇

(Hint: $BTC, $ATOM, $RON, $CHZ, $LUNA, $IMX)
Pure play investing allows you to simplify a view & take other factors out of the equation.

e.g. Cruises, airlines & hotels were pure plays on increased travel. Regional bank stocks are pure plays on rising rates. Paul Tudor Jones expressed pure play ways to bet on inflation.
In digital assets, you could argue there have been 4 real successful use cases of blockchain (to date), all of which are still growing

1) Sound money
2) DeFi
3) Stablecoins
4) NFTs
Read 14 tweets
Jeff Dorman, CFA Profile picture
Feb 3
1) A lot of folks asking "wen bottom"... that's obviously impossible to answer. But you can look for signs that narratives are shifting the other way even when consensus is all one way... for example...

(a thread 👇)
2) Everything that could go wrong has gone wrong for DeFi / Layer 1s this week. Yet, all of the applications survived the 3rd biggest stress test we've had in the last 2 years (May 2021 & March 2020 being the others).

Resiliency leads to confidence!

ar.ca/blog/defi-is-b…
3) Confidence boosters include:

a) $LUNA/UST bank run was thwarted, and UST peg held
b) $SOL hacked, but the hole was plugged immediately w/ "too big to fail" backstops
c) Wonderland / $MIM didn't spread mass contagion
d) $SUSHI apps prospered even amidst internal chaos
Read 13 tweets

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