3. Disclaimer
This presentation is not an offer to sell securities of any investment fund or a solicitation of offers to buy any securities or otherwise.
Investment strategies, including any described, involve a high degree of risk. There is no guarantee that any investment objective will be achieved.
Past performance is not necessarily indicative of future results. There is the possibility of loss and all investment involves risk including the loss of principal.
The information in this presentation is believed to be reliable and has been obtained from public sources believed to be reliable, however there is no
representation as to the accuracy or completeness of such information. Opinions and estimates in this presentation constitute current judgment and are subject to
change without notice. Any forecasts and estimates contained in this presentation are necessarily speculative in nature and are based upon certain assumptions.
It can be expected that some or all of such assumptions will not materialize or will vary significantly from actual results. Accordingly, any projections are only
estimates and actual results will differ and may vary substantially from the projections or estimates shown. This presentation is not intended as a recommendation
to purchase or sell any commodity, security, or otherwise. No obligation exists to update, modify or amend this presentation or to otherwise notify any reader
thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.
6. Beta: Alts > Bitcoin
Bull Market: High Beta -> High Alpha
Bear Market: High Beta -> Low Alpha
7. Crypto moves fast both up & down,
especially altcoins
Optimizing returns: ‘short’ term trading,
requires liquidity
Micro investment strategies do not work well
in contrasting macro environments / market cycles
Crypto still largely momentum based,
not fundamentally
Alpha, Beta, & Macro Market Cycles
13. Incoming ICO / Securities Focused Regulation
Exchange Trading Composition
Minimal VC exits, alt liquidity, many long-term SAFT blockchains yet to launch
Altcoin and VC valuations are not adjusted for illiquidity
Crypto Market Concerns
14. Bear Market Investing Strategies
Sell To Fiat & Wait To Buy Again
Arbitrage / Market Neutral Strategies
Short / Bet Against The Market
17. Short Selection (1)
Macro Environment
+
Micro Thesis
Overvalued as a platform for:
(1) Dapps
(2) ICOs
(3) Value Storage
18. Short Selection (2)
Liquidity
Short Term Roadmap
Breaking news / short squeeze risk
DexsExchangesOTCBorrowDerivatives
Asset Universe
Product Universe
AltcoinsBitcoin
21. Derivatives Overview
Hedge downside, speculate on / adjust upside exposure
- Swaps (e.g, Interest Rates)
- Futures / Forwards:
Will buy / sell [ ] amt of [ ] asset at [ ] date for [ ] price
- Options (e.g., Calls / Puts):
Option to buy / sell [ ] amt of [ ] asset at [ ] date for [ ] price
23. Options Example
BTC Option – December 2019 maturity – $10k strike – 1 BTC
The option to buy or sell 1 BTC at the end of next year for $10k
Call (Buy): ~$500
Put (Sell): ~$6,500
Data: data.ledgerx.com
24. Option Value (1)
BTC: ~$3,500, Call (Buy): ~$500, Put (Sell): ~$6,500
Put Rationale: I buy the option to sell 1 BTC for $10k in 1 year for $6,500
If I can exercise* the option now, I will buy 1 BTC now for $3.5k & use put to sell for $10k. This should cost ~$10k-$3.5k.
Call Rationale: I buy the option to buy 1 BTC for $10k in 1 year for $500
If I can exercise* the option now, I will would not buy 1 BTC now for $10k when I can buy on spot for $3.5k. The chance
that BTC goes over $10k in 1 year (allowing me to buy cheaper than $10k with call) gives the call it’s value.
Data: data.ledgerx.com *American option
25. Option Value (2)
Major Option Pricing Variables:
- Current Price (~$3,500)
- Strike Price (~$10,000)
- Time To Maturity (~1 year)
- Implied Volatility
Data: buybitcoinworldwide.com/volatility-index
Intrinsic Value
Extrinsic Value
26. Crypto Options In A Portfolio
Large $ / short portfolio:
- Call options to negate underperformance for large, unexpected up days (potentially swapping underlying for calls)
- BTC ETF approval
Large illiquid portfolio:
- Call options to negate underperformance of liquid asset rally
- Put options to hedge underperformance in bear market with lack of portfolio liquidity
Mandate:
- x% in one vehicle, etc.
Small notional risk can significantly tweak portfolio R/R