This is a segment of the breakdown newsletter.
“The 1921 version of Wakanda – it’s all vibranium.”
– Chief Egunwaleam Sun, Greenwood District, Tulsa
1. MSTR investment cases are incomprehensible
Forensics short-term seller Jim Chanos describes Michael Saylor’s investment pitch in strategy as “completely financially meaningful.”
Chanos responded to Saylor telling CNBC that investors should evaluate their strategy at multiples of NAV’s growth.
But Chanos argues that this is “like claiming that the market value increased from $450,000 to $500,000 last year.
Matt Levine agrees with Chanos that this is “meaningless.” There is also “crazy making” because the general idea that MSTR provides leveraged exposure to Bitcoin is pointless.
“I’m not levering bitcoin for youHe explains. “You put in the dollars and get back $0.50 in Bitcoin.
But one thing that Saylor certainly is that shortening the MSTR is dangerous. Chanos is far from the first short-seller to target MSTR, and so far, we don’t know if that worked.
However, it is difficult to discuss his investment advice.
2. Tron is “public” on US exchanges
FT reported that “Justin San’s digital assets platform Tron will be released in the US.”
I don’t think so that’s right TRX, the token of TRON, is correct as it is the new company Tron Inc., which holds the TRX token because it is listed.
Matt Levine describes Tron Inc. more accurately.
This feels like a shark jumping moment (in the phrase from my colleague NLW). Unlike Bitcoin and Sol, it is impossible to argue that TRX is decentralized enough to qualify as a product.
Therefore, the TRX Finance Company is a blatant regulatory ruling that allows investors to access unregistered security.
They seem strangely eager to do so — Levine pointed out that Tron Spack is trading at a 1,700% premium for NAV this week, suggesting that the stock market will pay $18 on a $1 worth of TRX.”
$18!
As long as investors continue to pay an unreasonable multiple of NAV for exchange listing code, we will continue to get more of it.
Even the hype that no one else from Crypto has ever heard of before still have spare companies.
Show us your incentives. I’ll show you the (almost certainly bad) outcome.
3. Cryptocurrency companies are systematic risks to cryptocurrencies
A report from Coinbase warns that the current surge in strategic imitation poses “systemic risks to crypto-ecosystems.”
The first risk they point out is that if the finance company is unable to pay off the convertible debt by issuing new debt, today’s buyer could be tomorrow’s seller.
That seems obvious enough, but no one else seems worried about it.
However, the risk of a “diving mirror” is when one or more of these entities unexpectedly offloads some of their crypto holdings, even for daily cash flow management or business operations purposes.
That also seems obvious in hindsight.
4. ETH as a digital oil
ETH circulates across multiple elevator pitches, including computers, ultrasound and cryptographic app stores around the world.
However, the Etherealize team wants to try again, and is now framing ETH as “productive reserve assets: powering digital oils into the digital economy.”
This justifies the $8,000 short-term price target, the $80,000 long-term goal, and the $740,000 “thinking experiment” target.
The latter would be worth Ethereum $89 trillion.
Lord, give the confidence of investors who think that $300 billion in assets could be 30,000% misprived (as a long-term thinking experiment).
Only by cipher.
5. The risk of black swans to the market?
Matthew Pines of the Bitcoin Policy Institute told David Beckworth he hopes the US will end the exemption to tax-free exemptions for foreign owners “in the next two months.”
Beckworth replies that this seemingly mediocre change in tax law is “shocking.”
The risk is that ending the exemption will likely lead to higher interest rates if foreign central banks switch from the Treasury to alternatives like German foreign und, Swiss franc, gold, and even Bitcoin (Pines thinks it’s 10 times easier in that scenario).
More importantly, this could destabilize global financial markets, which essentially rely on the finances as the world’s only riskless asset.
Certainly shocking – people are increasingly worried that America is slowly losing its “exorbitant privilege.” But this seems to be a way to lose it Quick.
The market is very skilled at pricing all political shenanigans this year, but I don’t think anyone is ready for it.
6. Circle Executive Big Payday
If I’m reading his SEC filing correctly, the circle’s Chief Legal Officer, Tarbert Heath, owns a new IPO’D CRCL shares and 839,761 limited units of 939,968 stock options (strike price of $25.09).
The stock priced this week at $150, worth a whopping $243 million.
Other Circle Executives hold more CRCLs, but here we mention Heath as he joined the circle 2 years ago.
It’s one thing to hit such an IPO jackpot as the founder. Making it as a recently employed employee is another thing.
I knew I should go to law school.
7. Blackwall Street was originally Wakanda
Recognizing the June holiday in the US, I thought it highlighted the surprising and tragic tales of Tulsa’s Greenwood neighborhood.
Surprisingly, with only 30 years being removed from the Civil War, Greenwood was an economic success story that became known as “Black Wall Street.”
From Wakanda Black Pantherthis honor is a bit mythical. For example, Greenwood didn’t have a Black Goldman Sachs.
But by 1900, Greenwood had become “an independent ecosystem of black excellence and prosperity,” and according to one account, “all was vibranium” and “deliberately a black community” (References). Black Panther Also).
Ironically, part of its success came from Jim Crow’s laws that forced Greenwood residents to spend money with businesses owned by their neighbors.
“In Greenwood, $1 will change hands 19 times before leaving the community,” according to local lawyer Buck Colbert Franklin. “That’s what you build true wealth.”
Some of the residents of All Black Greenwood were so wealthy that when envious white mobs began burning their neighborhoods in 1921, it was said that the nicest housing was spared, as it was hard to believe such a wealthy home could be owned by black Americans.
The attack on Greenwood was originally declared a “riot,” but some falsely imply that both sides were responsible.
But perhaps even more ironic, there was also financial reasons. Calling the 1921 event an “riot” allowed the insurance company to reject the claims filed by Greenwood residents.
The “riots” destroyed dozens of black-owned businesses and over 1,000 homes, but the only insurance claim paid was the white owner of a pawnshop attacked for guns and ammunition used against black people in Greenwood.
