Recap Week33 2023
The Big Short
Snapshots around 12.00 CET
Highlights:
Short was the direction to go this week with the Michael J Burry “13F” filing (again a lot of misinformation reported on Linkedin and Twitter which I will correct), Cryptocrash on Thursday night resulting in 1 Billion USD liquidations and tech darling Adyen getting nuked on the stock market.
Let’s go
Michael J Burry:
The information you see on social media:
No, he is not 93% short and or 1.6 billion USD. First of all the 13F filing filed last week is based on the position date 30th of June 2023. By now it could be changed completely. Second, the 1.6 billion is mentioned is based on notional value and not premium paid. It was not clear what the fund paid to buy the puts - an amount that could be a small fraction of their notional value - or the contracts' present value, given that regulatory filings do not require the disclosure of options strikes, purchase prices and expiration dates.
Explanation In Dutch by Nico Inberg:
https://www.deaandeelhouder.nl/columns/burry-gaat-short-what-else-is-new/
The Thursday latenight Cryptocrash within 10 minutes:
After relative calm and implied/realized volatility dropping, The market getting smoked with serious liquidations (even bigger than the FTX saga):
Toxic cocktail of events/headlines leading up to this:
Market liquidity or the lack thereof:
Risk off in general → Yields rising:
A Treasury rout that pushed 10-year yields close to their highest point since 2007 has spurred what is now the biggest break in an $8 trillion equity rally. Major US benchmarks just slid for a third straight week.
Evergrande headline (Chinese real estate developer) files for bankruptcy in the US. The move doesn’t exactly come as a shock; the struggle extend back to December 2021 when the company defaulted on a dollar bond.
Some (confusing) headlines about SpaceX/Tesla selling/write-off their stake in BTC. Who cares about Elon Musk?
And definitely short gamma hedging by derivative traders; when prices decline they need to sell even more.
Altcoins moved in tandem and some quality names approaching a staggering all-time low.
To end that eventful night with a slight positive news item and markets pared losses:
A lot of positive fundamental news earlier in the week:
The first European Spot BTC ETF went live:
https://decrypt.co/148433/jacob-asset-management-launch-europe-first-bitcoin-etf
Coinbase getting approval for BTC and ETH Futures:
https://thedefiant.io/coinbase-wins-approval-to-offer-crypto-futures-to-us-clients
Visa keeps on testing on Ethereum:
https://www.coindesk.com/business/2023/08/11/visa-eyes-mass-adoption-of-crypto-by-testing-method-of-paying-on-chain-gas-fees-through-fiat/
MK Opinion
Lack of Liquidity and over-leveraged positions will get you this. More liquidity needed and deleveraging. Sounding again like a broken record: The road to maturity will be long and bumpy.
Fundamentally positive news incoming so nothing changed on the investment thesis and long term catalysts. No crystal ball in terms of short term price movements.
Also an interesting positive article in Financieele Dagblad:
https://fd.nl/financiele-markten/1479578/vijf-beloftes-die-de-cryptomarkt-uit-zijn-winterslaap-kunnen-wekken?
Brutal Adyen
Probably the biggest intraday decline since Ahold in 2003 (US Foodservice) in the AEX.
The market response to the earnings report was significant, with Adyen's stock declining by 40.7% and erasing nearly €18 billion in market value.
Coin | Other News:
Arbitrum (ARB) unlock:
https://www.coindesk.com/markets/2023/08/16/arbitrum-will-unlock-12b-arb-in-march-2024-token-unlocks/
SEI (SEI) mainnet is live:
https://www.coindesk.com/markets/2023/08/15/sei-mainnet-is-live-after-testnet-sees-more-than-75m-wallets-created/
Shiba (SHIB) total mess:
https://cryptoslate.com/shibarium-launch-falters-locks-2-5m-in-funds-prompting-shiba-inu-tokens-fall/
Crypto sleuth ZachXBT called Shibarium's recent launch "sloppy" after 1,003 ether ($1.8 million) in transactions got stuck in a pending state.
Justin Sun - Whitebit:
https://cryptonews.com/news/crypto-billionaire-justin-suns-huobi-linked-exchange-whitebit-raises-concerns-over-its-lending-platform.htm
Zynga breaks new ground with Web3 game:
https://cryptobriefing.com/zynga-breaks-new-ground-with-web3/
Bitgo (Custodian) raises capital at at a valuation of $1.75 billion (cc Vaultavo):
https://www.coindesk.com/business/2023/08/16/bitgo-raises-100m-after-scrapping-prime-trust-deal-bloomberg/
Hedera (HBAR) Dropp (microprayment provider built on Hedera) added as a FedNow Service Provider:
https://www.coindesk.com/markets/2023/08/14/hbar-rallies-on-fednow-addition-of-hedera-based-dropp/?
Dropp offers a different way to pay than credit cards, making small payments using technology that shares information across many computers. It uses Hedera Hashgraph's platform and accepts HBAR, its native token, as well as U.S. dollars and USDC.
However, FedNow has also said that Dropp’s placement on the site is not an endorsement of it. “The FedNow Service does not incorporate or integrate with Dropp, and maintains no service relationship with Dropp,” said a Fed spokesperson to the International Business Times.
SEC appeal vs Ripple (XRP):
MKs Conviction Client Portfolio:
Trading activity:
Portfolio value +16% year to date (YTD).
Always fun to trade at midnight when a crash occurs but your portfolio manager was up and running and at his desk. :)
As we are migrating the portfolio to Amdax as of the 1st of September, a different look of the portfolio track record will be presented. As Amdax has not yet all of my coins available, the porfolio will be incomplete for the time being. More weight to ETH as a result.
The week ahead by Nomura and Livesquawk:
https://www.nomuraconnects.com/focused-thinking-posts/the-economy-next-week/?
https://www.livesquawk.com/report/special_ls-focus-on-the-week-ahead
NVIDIA earnings
Upcoming Events:
Happy Sunday