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Cycle Bottom Profile picture
@BULLReturns
Oct 25, 2022 • 4 tweets • 2 min read • Read on X
Assessing the survivability of #bitcoinminers

A) Understand the debt structure, particularly what falls due within the next 18 months
B) Assess the liquidity position today & over the next 18 months
C) Check on operating cashflow positivity at current #Bitcoin prices & lower
1/
D) What is the end of 1H 2023 liquidity picture like.. (cash+coins-debtpayments-/+6 month cash margin less capex obligations)
...positive margin of safety is required otherwise material dilution and/or bankruptcy becomes a high risk.
....conduct the same exercise yr end 2023.
2/2
Thoughts on potential cashflow recovery for #bitcoinminers

#Bitcoin pricing and sector operating CF margins:
1H 2024 $30,000 17%
2H 2024 $40,000 37%
1H 2025 $60,000 58%
2H 2025 $80,000 70%
1H 2026 $100,000 75%
2H 2026 $120,000 80%

Example: 20 #Bitcoin per day 2H 2025..

1/2
..equates to annualized operating CF US$400m.
So locating a market cap below $400m through 2023 that can deliver such a production rate would be trading on 1x CF multiple, $200m would be 0.5x.
Note the debt load of up to 1bn on the balance sheets which has funded the capacity
2

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More from @BULLReturns

Cycle Bottom Profile picture
May 6
What will be the average PE of your pre-production sub $200m #uranium caps in 2027?
If you are saying < 3x .... best you get real with the dilution.... 50% assumption in the capex year, excluding the 15% annualized burn is likely.
If you are saying over 9x we hope you voted > 30x for the larger cap sisters.
Read 4 tweets
Cycle Bottom Profile picture
Apr 28
Hate allows unique fresh asymmetric themes to be uncovered on a continual basis.
Positive Consensus is where mediocrity is located, hence we avoid it.... generally a scale down indicator
Roadkill is often located with extreme hate..... then wonderful things occur... this is not a buy story even with 3-4x upside remaining = 100x for the cycle. Image
Read 4 tweets
Cycle Bottom Profile picture
Apr 25
At what point do you vote with your feet to exit such a system.... 25% tax on unrealized capital gains, so one will be forced to realize to pay the taxes on > 10 bagger.
Forced liquidations for tax bills could occur.... imagine Musk & Buffet tax bills which would require stock liquidations to pay.
We continue to believe the 1st world is reverting to the 3rd and the 3rd to the 1st....If you have more than $2m of net liquid assets and are compounding at above >20%, depart the bad taxation western countries as soon as you can.
Read 5 tweets
Cycle Bottom Profile picture
Apr 16
12 minutes on the 1 hour cycle clock folks #Silver #Gold
2nd Quartile $2500-$2800 / $32-38

3rd Quartile $2800-$3100 / $38-44

4th Quartile > $3100 / > $44

Understanding the cycle is the 1st 🗝️
Average < $100m cap return delivery for those moving projects ahead from cycle lows.

1st Q = 150%

2nd Q = 300%

3rd Q = 500%

4th Q = 800%

#gold #silver
Read 4 tweets
Cycle Bottom Profile picture
Apr 8
We have exited, leaving the remaining 50% return to the late arrivals. #uranium
Without stating the dilution, this chart has very little meaning.
For context, in 2003 the cap low was <2m and in 2018 it was around 100m.... hence the magnitude 50x difference in starting position will reduce this cycles return by 50x plus.
Read 4 tweets
Cycle Bottom Profile picture
Apr 7
For our followers we guide them on how to increase their success rate to over 80% by following these simple rules on #repeatablecyclicality:

a) Deploying within 6 month of a cycle bottom

b) Scaling out within the last 50% of returns from a sector (post >5x returns)

1/2
c) Avoidance of critical errors causing material losses

d) We guide you on near cycle lows and scale down ranges for mature cycles

e) Indicating the bias' which reduce your success - FOMO, over crowded themes, recency extrapolating, over bought upcycle legs etc

2/2
A selection of critical errors:
a) Not having sufficient positions per theme or having too many
b) Not understanding the cycle you are involved in
c) Not understanding how contagion creates major draw downs
d) Not understanding where the cycle is going
e) Incorrect correlations
Read 5 tweets

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