SharperDingaan

Same as every other native coin, ETH has two values; utility, and investment. For utility purposes it does many things well (token wraps), but competition has been steadily eroding its utility value. For investment purposes it was the primary diversification purchase in a crypto portfolio, but its weight in a portfolio has steadily declined as other options have progressively become available. The other choices were NFT, bitcoin farms, etc. ETH did well in an X/15/85-X portfolio; so long as the 85% in BTC rose in price, and the X% declined as the alternatives lost popularity. The presence of the CME options and futures markets in ETH ensured a high minimum weighting; and if those options were sold for premium, created a crypto convertible. While investment value was always greatly exceeding utility value, ETH just needed to continue being used within the development community. Fast forward; today BTC is also a diversifying asset within the cash allocation of a portfolio, and the crypto portfolio is more of a X/50/50-X allocation. Lot less benefit from BTC, and the alternatives are a lot better than they were. All else equal; with less rocket fuel available, ETH is unlikely to comparably perform as it has in the past. With a lot of implications around portfolio optimisation and mostly negative; going forward, most would argue that the existing $ in ETH is better spent as a new $ in BTC. The obvious overlay is a longer term ETH/BTC pair trade done via the derivative markets, with periodic settlements against existing holdings. Just a different POV. SD

Lets leave it as an object lesson on the immutability of blockchain .... make a mistake, you can't erase it! The real value to this technology is blockchain; BTC is just the payment app that demonstrates the use of blocks on a chain, and bitcoin protocol/smart contracts to chain them. Granted, it's a pretty damn good application! but its only a small part of the whole enchilada. It's new technology, there's nothing else remotely like it, and most all recognise that it is an industrial revolution. Just as cars replaced horse/buggy, and steel/steam replaced wood/sail/water, it's a leap of faith; but if you don't familiarise yourself with it, and it comes about ..... you could get badly burnt in the coming change. Lot of posters on this board were sceptics at first; today BTC is now a material portion of their portfolio, with much of it from rising asset valuation. What could have gone wrong ??? they hadn't learnt further, and remained poor. An added benefit is that some of the posters on this board, go back to near the beginning of BTC in 2008. Step away, put in your hours, then come back. SD

It's just not a DCF valuation; same as every other methodology, you end up with a number in a given time frame that you have to ascribe confidence to. As usual, one could be bang on with the value .... but way-off on the timing. Sadly, sh1te is still going to happen! SD

Incomplete phrasing; I would patent the cure and licence it out to one/two pharma's for royalties + stock. The cure becomes available to those who can pay, and I hopefully end up having to file a report anytime I trade the pharma's stock Decades later (after the patent expires) I work with the UN, a low cost knock-off is made available to the 3rd world, and my name goes up on the side of some building. Just a different PoV. SD

There are other methods ... they are just proprietorial and not public. When you have the cure for cancer ... only an idiot would make it public SD

You are a portfolio analyst. You would like BTC to be one of the assets in your portfolio. Bonus depends upon it. To optimise the portfolio you use the asset correlation coefficients and Black-Litterman. Easily computed using the last 60 months of data. The optimal portfolio weighting is 22% to BTC, and executed. BTC falls 25%, the portfolio is underwater and under review. Correlations are recalculated, the optimal BTC weighting is found to be 12%; you're fired. Why? You hadn't realised that with BTC in the universe, the correlations weren't stable enough; the BTC should have been ejected. The PM keeps his/her job, and simply hires another portfolio analyst. Sentiment changes; 6 months later BTC is added to the portfolio again. Did it work out as as an investment? ask the portfolio analyst who got fired. SD

Just to demonstrate a potential 'valuation' .... Assume the halving is every 4 years, and it doubles the price of BTC. The 4-year CAGR is 19%. Assume the money press prints 9% more over the next year (conservative?). Therefore, anytime that BTC rises by more than 28% (19%+9%) within the next 12 months, you're up. Compute the BTC rolling annualised X-week return for Y weeks/months, and assess; thereafter, it's just straight forward technical analysis. All judgement; zero DCF valuation. SD

One random post ..... ! Folks just can't get past that the price of BTC cannot be supported by DCF valuation; the reality is that it doesn't exist yet, 'cause it's just too early. Not much different to trying to value a relationship ... as many have pointed out. We look primarily to where the puck is going, and try to position ourselves accordingly. Cut losses early; sell when the hot and heavy breathing is just about in our ear; quietly buy back in the aftermath of the big event ... little more than a different application of Agile Project Management. Same as every other hard asset, BTC rises by at least the year-on-year increase in money print. But it rises by even more if/when level II/III use can displace some of the 2nd/3rd world use of USD bills (fiat cash), and/or some of the former monetary gold-standard is replaced with a monetary BTC standard. Each is a fundamental game changer, but it's not possible to accurately value either of them until it's commonplace. C'est la vie. We hold our BTC via a BTC-ETF, and we hold in quantity. Similar to an emerging market fund; when we see extreme liquidity we try to exit, and in quantity .... buying back slowly at some future date, at lower prices and a deep liquidity discount. Low key version of market making, and price has little to do with it. Not for everyone, but it has worked out well for us. SD

BTC, concentration and the money press thing ...... To get ahead is to not just buy and hold something that will outperform the money press, it is ALSO to trade the price volatility of that thing. Then you need to recognise that the return from trading the volatilty will be multiple times that of holding the asset itself. There is a reason why so many of those who have done well at this, have ALSO seen so many market/business cycles; it's a progression. If you had loaded up when BTC was 57K and sold at 75K (+32%), you have done very well for a few weeks exposure. But for the SAME next few weeks of additional exposure are you likely to do as well by simply continuing to hold BTC, or by swing trading it? Most would say swing trading it. To do well at the swing trade, one has to 1) recognise when it's currently the better of the two options, and 2) have the expertise and risk tolerance to execute. The more cycles you have experienced, the better you should be at this. SD

US shale production is a function of price, current break-even is around USD 65/bbl. While most would expect Trump to allow fracking, cut regulation/royalty costs on new drilling, and that new drilling to be primarily 'manufacturing' by the majors; it's mostly a wash net of ongoing depletion. All else equal, similar ongoing production, but at a steadily lowering break-even. Not bad. Near/medium term growth largely depends on a new and reliable supply of heavy oil for blending, and Trump allowing the industry to 'flare' surplus gas without penalty. The obvious solutions are 1) Trump reopening the CAD/US Keystone pipeline project, building the remaining relatively short connection piece, and importing tariff free CDN heavy 2) importing tariff free Mexican heavy, and 3) importing sanctioned heavy. Expect a lot of 'real politic'. The 1st mystery is tariffs; if they apply to oil imports, oil for domestic consumption will sell for more, raising domestic production. The 2nd mystery is Russia; Russia/Ukraine war ends, sanctions removed and importation of heavy Russian crude begun, new drilling with western technology permitted. Sanctions on Iranian exports tightened, Iranian production/facilities sabotaged, everyone else takes up their lost production. Price averages out at about the same, even if Iran attacks the facilities of others. Lot of favours need to be repaid; but over the near term, US shale isn't likely to change much. SD

The real threat is a 'supra' CBDC using a version of BTC protocol, that displaces USD as the global reserve currency. USD devalues rapidly, trade partners competitively devalue; no real short-term change, but the price of BTC (in local fiat) rises as the currencies devalue. Inflation ticks up for everyone, raising hard asset values (real-estate), and market yields (real + inflation). Fed Reserve offers a BTC backed (inflation immune) USD trade currency as the global reserve currency ... that is also protected by the 'might' of the US/NATO. Awesome! Or .... most of the worlds trade blocks, supported by their CB's, collectively agree to denominate and settle their trade in 'supra' CBDC. Also inflation resistant, but reliant on collective management, vs that of a single entity (US) to manage it. Also awesome! ... but not so much for the US. SD

It's the same thesis, it's just integration into main stream finance that's evolving. MSTR as guarantor (central bank) of direct BTC loans (borrow and repay in BTC), lending at maybe 20:1 ... looking like a CB but not actually being one. Over time; MSTR either loses the niche to industry as BTC becomes just another kind of loan, or is replaced by the US Fed Reserve under updated legislation (populating the vault with the silk road seizure &/or acquisition). Fed Reserve USD devaluation, offset against the BTC vault revaluation in USD. New type of US T-Bills secured against the BTC loan book, and BTC options and derivatives more securely tied into the Fed Reserve via the CME. Elegant. SD

Ethics thing. The ethics of the identical situation are different everywhere in the world. You don't rip your client off 'cause it's bad for business, the ethics restriction is just byproduct. Curriculum. There are many ways to doing investment, value is just one. It behooves one to be aware of the other approaches and how they work, agreement is not a requirement. Employer. It's up or out, and no different to accounting, cpg, legal, academia, etc. Cheap bunnies drinking cool aid goes a long way to keeping costs down, and when you're king ... you're the beneficiary. Play the game or walk away, your choice. Everyone makes poor choices, but life moves on, and you either reinvent yourself or live miserably for the rest of your life. Most CFA's and MBA's work in the corporate or public sector, not IB. As it's just not worth the drama. SD

It's a union card, the same as an MBA. Different markets will value the letters differently, but if you don't have them .... don't bother applying. When the employer pays the dues, you don't much care. To the employer it's a marketing and insurance cost, get caught doing something unethical; it minimizes the severance cost. Value is different for everyone. If you know little about investment it's worth considering. If you're doing an MBA later, you will just be swapping your finance course for an elective. The CFA Way is just the starting point; you're expected to evolve your approach as you build your experience. It's also an ego thing. In the early years, gross pay divided by work plus study time is often less than minimum wage. That freshly minted CFA also has the identical skill set, and is now available at cents on the dollar when the holders live in different countries. The supposedly smartest guy in the room ... that is dumb as a brick in a globalized world. Been there, done that, long since moved on. Just a different POV. SD

Very good! SD