musings - part 2 - smart money

During the week I came across Morgan Stanley's SEC filings with regards to number of its funds nearly doubling their allocations in GBTC, thus more exposure to bitcoin. At first, for couple of hours I was super excited & bullish until I wondered about the wider context and from where we have come since the last bear market. These thoughts got compounded upon when I read QCP Capital's note 24 hours later (about "smart" hedgefunds buying tons of calls and having to see the position go against them).

"Smart money" is just a bunch of deep pocketed folks / institutions. A lot of them only saw the investment thesis of crypto post Covid crash when other sources of yield started to disappear. Moreover, in the current Twitter/TicToc world; copy trading has become a great way of trying to run an individual's trading casino. My mind fleets between following thoughts

• It feels rather too easy for everyone to get rich together, or
• I am becoming deluded as I get older and get richer through things I utilised (e.g. ENS air-drop). I understand the economics and "organisational" need yet I "feel" valuations are too high, or
• Is this the birth of devaluation of fiat to such an extent that folks are happy to part way with their hard earned $ to own any "asset", or
• Are we (retail) the exit liquidity of Raoul Pal (Real Vision), Su Zhu (Three Arrows Capital)..and the like?, or
• Is this the "new efficient market" where even Raoul Pal, or Su Zhu or Carl Icahn can be right yet their timing may not be. Therefore, if we (retail) followed their positioning blindly then we not just get liquidated but also become their's (Raoul, Su, Carl etc) "entry" liquidity

/end musings - yes ending this mid-thought as I have not settled on a real answer to above thoughts yet. I am certain some experienced market participants have greater wisdom herein that can help clear the fog above.

Interesting Reads / Listens:

Some good reads for the weekend - thanks to twitter again for reminding me of these!

Money, blockchains, and social scalability

Introduction Blockchains are all the rage. The oldest and biggest blockchain of them all is Bitcoin , which over its eight-year hist…

Nick Szabo

An Honest Account of Fiat Money

A framework for Bitcoin skeptics, part 1

MediumHasu

Credible Neutrality As A Guiding Principle

When building mechanisms that decide high-stakes outcomes, it’s important for those mechanisms to be credibly neutral.

NAKAMOTOVitalik Buterin

Blockchain Governance: Programming Our Future

This post describes why blockchain governance design is one of the most important problems out there, its critical components, current…

MediumFred Ehrsam

Funding the Evolution of Blockchains

Blockchains are digital organisms. As organisms evolve through changes in their DNA, blockchain protocols evolve through changes in their…

MediumFred Ehrsam

Markets Are Eating The World

For the last hundred years, individuals have worked for firms, and, by historical standards, large ones. That many of us live in suburbs and drive our cars into the city to go to work at a large of…

ribbonfarmTaylor Pearson

DAO Lay Lo Mo | BitMEX Blog

(Any views expressed in the below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.) After spending a third of my life in Hong Kong, my Cantonese is still rubbish. I…

BitMEX BlogArthur Hayes