Cryptocurrencies

[tede02]

I found Lyn Alden's recent piece on alt-coins super interesting. Analogizing ETFs and market exchanges to utility blockchains was the most cogent and logical explanation I've seen. Her view is that most crypto coins are unlikely to generate significant value to the coinholders themselves despite potentially creating a lot of utility for users of applications that operate on the rails (stablecoins as an example). The point she makes about the miniscule revenue generated by ETF providers and exchanges, despite billions and trillions of trading volume, really struck me. What are the counterpoints?

 

https://www.lynalden.com/why-most-cryptocurrencies-wont-accrue-value/

[Longnose]

18 minutes ago, tede02 said:

I found Lyn Alden's recent piece on alt-coins super interesting. Analogizing ETFs and market exchanges to utility blockchains was the most cogent and logical explanation I've seen. Her view is that most crypto coins are unlikely to generate significant value to the coinholders themselves despite potentially creating a lot of utility for users of applications that operate on the rails (stablecoins as an example). The point she makes about the miniscule revenue generated by ETF providers and exchanges, despite billions and trillions of trading volume, really struck me. What are the counterpoints?

 

https://www.lynalden.com/why-most-cryptocurrencies-wont-accrue-value/

I havent read this yet. But i will make time. I respect lyn's thoughts a lot. I have long held a similar opinion that most the alt coins are enablers to new technologies that will create serious new efficiencies for businesses and entities. The only one I feel is different and has the potential to function as a currency is Bitcoin.  When you really start getting in an playing with the blockchains and transacting on them making your own tokens/nft's and see how they are made and what you can do with them you start to say wow I can think of dozens of ways to make things so much better with this technology.

 

Robinhood is tokenizing private companies. They are tokenizing assets in europe and cutting out the stock brokers/exchanges. its causing some serious disruption. 

 

So overall i agree and will always be leary about putting money into the altcoin world. But you may accidently win the lottery by just being exposed.

[SharperDingaan]

If you have not done so already, you might want to take advantage of the very large US liquidity injection this morning. While there was good reason for that, the underlying pressures haven't changed; without the injection, treasury companies (MetaPlanet, etc) would have had to start selling down their BTC.

 

https://cointelegraph.com/news/bitcoin-battles-50k-price-target-fed-adds-13-5b-overnight-liquidity

 

Look through the hype, and a newer treasury company is little different to a real estate speculator. Ongoing realised and unrealised gains, covering the monthly cash burn .... then there's an extended period of little growth drying up the flow of business ... and the price starts to fall.

 

SD

Edited December 2, 2025 by SharperDingaan

[Paarslaars]

Care to elaborate on that?

 

I see no case for that. Metaplanet is financially sound, no need to sell BTC anytime soon.

 

Also the US injects liquidity based on large institutions asking for it via repo, don't think this has anything to do with BTC treasuries. With QT ending it is likely only more liquidity is coming, chances of rate cuts in Dec have also gone up go 80%.

[SharperDingaan]

Not to pick on Metaplanet as they are just representative .... deep underwater on their BTC, borrowing against the BTC to avoid liquidation; not able to do a share issue at current low prices, to raise the funds to buy more BTC and lower the cost base, without diluting shareholders out of existence. The lower BTC goes, the less margin capacity they have left, and the closer they get to a forced liquidation. Metaplanet is one of the better BTC treasuries, with access to Japans finance ....

 

The lower BTC goes, the more risky, and the more likely creditors reduce the [liquidity related] LTV they will accept against the BTC held as collateral; the dominoes start to fall, and it's a race to USD 50,000.    

  

https://finance.yahoo.com/news/metaplanet-doubles-down-130m-loan-171736705.html?fr=sycsrp_catchall

 

SD

 

[Paarslaars]

Deep underwater... you mean 19% while we are in a dip?  I think that is fine and certainly not the first time, they were underwater in April this year or August '24 as well. I don't see 50k USD for BTC happening anytime soon but you never know.

 

While I won't claim to have your experience in macro trading SD, I can't be other than bullish when BTC has reached ATH's in a QT environment. I think 130k is more likely next rather than 50k...

 

PS: Metaplanet has started issuing preferreds now. This limits the need for share issuance but yes also brings along dividend obligations.

Edited December 2, 2025 by Paarslaars

[SharperDingaan]

Meta is just an example. Yes, the 650M unrealised loss is only a small % in the context of the total portfolio, but it points to their cost base being too high for the current environment. Makes a good headline, and most would ignore the context.

 

When liquidity dries up, loans get called, and credit lines get cut back. Get caught carrying too much debt, without the ability to refinance it (share sales, new loans, etc), and there is a need to sell down some collateral [BTC]. A BTC treasury having to sell some of its BTC, is enough to make demand hesitant, when sizeable supply is coming to market. Thereafter, should the BTC price continue to drop ... contagion does the rest. Today we're enjoying USD 5.3B of new liquidity .... thanksgiving weekend, it looked quite different, and the market dropped USD 5K/BTC.

 

We're bullish overall on BTC, but also approach this as a treasurer would. The cure to a liquidity discount upon sale, is a very low cost base; the solution is to roll in slowly, and use the forced sales of other BTC treasuries as/when they occur. No need to rush, or contribute more demand than is required.

 

Different point of view. 

 

SD

Edited December 2, 2025 by SharperDingaan

[Fly]

10 hours ago, tede02 said:

I found Lyn Alden's recent piece on alt-coins super interesting. Analogizing ETFs and market exchanges to utility blockchains was the most cogent and logical explanation I've seen. Her view is that most crypto coins are unlikely to generate significant value to the coinholders themselves despite potentially creating a lot of utility for users of applications that operate on the rails (stablecoins as an example). The point she makes about the miniscule revenue generated by ETF providers and exchanges, despite billions and trillions of trading volume, really struck me. What are the counterpoints?

 

https://www.lynalden.com/why-most-cryptocurrencies-wont-accrue-value/

 

Excellent read, Lyn nails again why BTC is the king. 

 

Cryptography is not very efficient for securing data when it comes to speed/scalability. The only "killer app" for crypto is the ability to serve as a decentralized, immutable, permissionless ledger. And the only real desire for those qualities lies in a non-sovereign currency. 

 

I'm sure stablecoins will continue to grow, but they are really just CBDCs that are wrapped and sold by 3rd parties. There is really no need for cryptography, it just serves as a way to latch on to the BTC appeal.

 

Edited December 3, 2025 by Fly

[TwoCitiesCapital]

On 12/2/2025 at 8:02 PM, Fly said:

 

Excellent read, Lyn nails again why BTC is the king. 

 

Cryptography is not very efficient for securing data when it comes to speed/scalability. The only "killer app" for crypto is the ability to serve as a decentralized, immutable, permissionless ledger. And the only real desire for those qualities lies in a non-sovereign currency. 

 

I'm sure stablecoins will continue to grow, but they are really just CBDCs that are wrapped and sold by 3rd parties. There is really no need for cryptography, it just serves as a way to latch on to the BTC appeal.

 

 

I generally agree. 

 

I thought that perhaps some of these DeFi applications might pave the way for a new way of organizing (like DAOs) which might offer a divergent path to corporations, non-profits, etc. That may still be the case, but am not really seeing development of any real interesting use cases for this. 

 

Something like a decentralized insurance company using oracles to confirm policy-events and capitalized by stakers and run by programmers all over the world through a DAO might be cool and effective. It doesn't necessarily have to be fully decentralized, not everything needs to be stored on the blockchain (could run a private side-chain and just keep record of policy payments on Ethereum), and perhaps the decentralized nature with no white collar bureaucracy at the top allows for them to overcome some of the drag of the blockchain tech....

 

But still hasn't happened yet and I'm less optimistic it will. 

[SharperDingaan]

If really needs the various regulators to add the crypto backbone, propose acceptable use cases, the pro's/con's, and the new capital requirement if the use case is adopted. Think of anything with material catastrophic risk that needs to be insured (nuclear, space, shipping, etc). Why is it that the specific risks are not on a regulators transparent reinsurance block chain, with each block on the chain being a reinsurance tranche? along with reasonably current inception to date claims data. Too difficult?  or really ... just a lack of imagination.

 

Regulators are reactive, not proactive .... tell us what to do! 

 

SD

 

 

 

 

 

 

 

 

 

Edited December 6, 2025 by SharperDingaan

[brobro777]

Damn guys I went to my dentist in Glendale today and the dental hygienist went on and on about how she invested in crypto and really, really believed in it. That's gotta be some ominous ass shit for crypto, man, ominous

 

I wanted to respond by singing Kenny Rogers' Gambler but I had that suction thing in my mouth

 

 

[jfan]

On a similar vein, one of the fathers at my kids school quit his job to do stock day trading recently. Might a sign of the times where wages aren't keeping up to the cost of living, people are desperate to escape. 

[brobro777]

1 hour ago, jfan said:

On a similar vein, one of the fathers at my kids school quit his job to do stock day trading recently. Might a sign of the times where wages aren't keeping up to the cost of living, people are desperate to escape. 

 

Huh, I would have thought it would be trading crypto and 0DTE options, not stocks

 

Anyway my hygienist talked about spending money on online courses, on top of her belief in da future of crypto

 

gotta know when to fold em, know when to walk way, when to run...

 

 

[Paarslaars]

https://dgt10011.substack.com/p/the-one-chart-that-explains-why-bitcoin?r=4e7rq6&utm_campaign=post&utm_medium=web&triedRedirect=true

 

This explains in part the BTC IPO fase. Forced selling from whales due to covered calls being assigned.

[Milu]

2 hours ago, Paarslaars said:

https://dgt10011.substack.com/p/the-one-chart-that-explains-why-bitcoin?r=4e7rq6&utm_campaign=post&utm_medium=web&triedRedirect=true

 

This explains in part the BTC IPO fase. Forced selling from whales due to covered calls being assigned.

I wonder how much of these assessments are just people trying rationalise a normal market drawdown. Bitcoin has gone down numerous times over its history, a 30-40% drawdown should be expected regularly, I don't get why people are so interested in explaining a reason behind it. Selling calls or doing other options trades are part and parcel of a large liquid market so not sure what the issue is. 

[Paarslaars]

I think they try to explain movements where BTC is acting differrently than previous. Like not following the 4y cycle or going down in Oct & Nov which are typically the best months. Could be just as coping mechanism.

 

But I agree 30%-40% drawdowns are still to be expected, don't think we see 80% anymore with institutions loading up but we will see.

[Milu]

Feels like some serious coping alright. The asset is quite institutionalised now so I think the days of massive short term price appreciation is behind us, also means that the 80% drawdowns are less likely too as you said. My mental model is that it will trend towards a more volatile version of gold, which suits me fine. I don't think its something that will 3x in a year or anything like that anymore, but could still do 20-30% CAGR on the way to 500k depending on how quickly it gets there. 

[SharperDingaan]

A lot of it is just people trying to find an explanation .... 'cause their initial assessment could not possibly have been just wrong. 

 

BTC pricing is liquidity driven, and liquidity is moving into bullion to support the new BRICKS currency. USD 40B/month of fed reserve injection isn't enough to both mop up treasuries and goose BTC. We know from the last injection that USD 5B raises the price of BTC by roughly USD 6,000.

 

Low forecasts are because BTC treasuries are expected to have to sell some of their holdings.

 

SD

 

Edited December 15, 2025 by SharperDingaan

[Paarslaars]

12 hours ago, SharperDingaan said:

Low forecasts are because BTC treasuries are expected to have to sell some of their holdings.

 

Curious about this. On the one hand you are correct, two smaller BTC treasuries have already sold some.

On the other hand, I see good financial stability with the larger ones, so I am not sure if they will be forced sellers anytime soon.

 

What I believe makes a bigger difference is the lack of buying. BTC treasuries were huge buyers in H1 this year, that demand has somewhat dried up since only MSTR is still making substantial purchases.

 

I find the BRICS currency thing interesting, how would the US fight against this?

Would it be in their best interest to sell their gold reserves? This could crash gold prices and cause a big blow to the BRICS countries. At the same time it would be a budget neutral way to obtain more BTC. I am not saying it is likely to happen but sure would have some benefits to it.

[Dave86ch]

15 hours ago, Milu said:

I wonder how much of these assessments are just people trying rationalise a normal market drawdown. Bitcoin has gone down numerous times over its history, a 30-40% drawdown should be expected regularly, I don't get why people are so interested in explaining a reason behind it. Selling calls or doing other options trades are part and parcel of a large liquid market so not sure what the issue is. 

Fully agree.

[wachtwoord]

Indeed, I also dont see much of a difference: https://medium.com/coinmonks/bitcoins-ipo-moment-let-s-hope-not-f6505bde9442

[SharperDingaan]

8 hours ago, Paarslaars said:

 

Curious about this. On the one hand you are correct, two smaller BTC treasuries have already sold some.

On the other hand, I see good financial stability with the larger ones, so I am not sure if they will be forced sellers anytime soon.

 

What I believe makes a bigger difference is the lack of buying. BTC treasuries were huge buyers in H1 this year, that demand has somewhat dried up since only MSTR is still making substantial purchases.

 

I find the BRICS currency thing interesting, how would the US fight against this?

Would it be in their best interest to sell their gold reserves? This could crash gold prices and cause a big blow to the BRICS countries. At the same time it would be a budget neutral way to obtain more BTC. I am not saying it is likely to happen but sure would have some benefits to it.

 

Most of the BTC demand is from BTC treasuries, BTC ETF's, and sovereign/corporate treasury holdings of BTC vs T-Bills. Falling BTC prices crimp retail ETF demand, and most corporate treasurers would prefer to use BTC options/futures vs buy incremental BTC-ETF. So ... for the BTC price to rise, there has to be NET buying from the BTC treasuries, and a liquidity pump to buy the BTC treasury prefs that finance the incremental purchase. Fed Reserve QE5, and consolidation as the stronger BTC treasuries gobble the BTC holdings of the weaker. 

 

A reserve currency doesn't just collapse, the demise is 'managed' (ie: Pound Sterling); lot of ways it can be done. While the BRICS are using gold to back their currency, most would expect the US to also use BTC as a reserve asset - if only 'cause many don't believe the US has the physical bullion claimed. So much so, that it is wiser to hold physical bullion reserves OUTSIDE of the US, so that it cannot be expropriated. Hardly surprising, when a US signature on a trade agreement is no longer trusted.

 

If the US had the physical bullion; it has very likely already gone to the BRICS vaults, the middle east, and asia. However, while paper gold can be sold at any time, there are real limitations when you're reliant on borrowed gold held abroad.

 

The best defence is restored global trust in US administration, which is no longer practical. When even a Canada is doing everything that it can to reduce reliance on the US market, the writing is on the wall. Not a bad thing overall, but the sun is setting on the empire.

 

SD

[TwoCitiesCapital]

13 minutes ago, SharperDingaan said:

and most corporate treasurers would prefer to use BTC options/futures vs buy incremental BTC-ETF. 

 

Why is this? I understand the implicit leverage for hedge funds, but why pay the ~20-30% annualized cost of carry when you could just buy spot/ETF for significantly less if your intention is to buy/hold as a treasury asset? 

 

13 minutes ago, SharperDingaan said:

A reserve currency doesn't just collapse, the demise is 'managed' (ie: Pound Sterling); lot of ways it can be done. While the BRICS are using gold to back their currency, most would expect the US to also use BTC as a reserve asset - if only 'cause many don't believe the US has the physical bullion claimed. So much so, that it is wiser to hold physical bullion reserves OUTSIDE of the US, so that it cannot be expropriated. Hardly surprising, when a US signature on a trade agreement is no longer trusted.

 

I see this as a possibility, but not really certain of the probability. Certainly disagree with "most would expect". If that were true, you'd have retail front running the announcement and prices sky rocketing. 

 

13 minutes ago, SharperDingaan said:

The best defence is restored global trust in US administration, which is no longer practical. When even a Canada is doing everything that it can to reduce reliance on the US market, the writing is on the wall. Not a bad thing overall, but the sun is setting on the empire.

 

+1

 

Ain't gonna happen and nobody else really able/willing to step in. Is what makes it seem probable to me that it will be some neutral asset, like Bitcoin, but we're many years away from that being the case. 

[SharperDingaan]

I hear you.

 

Treasurers. Lot of Investment Policy Statements are under review around BTC-ETF; specifically the magnitude/volatility of the liquidity discount if there has to be a forced sale at an inopportune time. Not wise to change the existing position, so a conservative solution is to include the derivatives so that the BTC-ETF value is hedged; when the instruments have multiple times the leverage of a ETF ...  there is a lot of opportunity 

 

Most would expect. Ordinarily would agree, but when the US has a lot of BTC (seized silk road), and with Orange Boys presence in the crypto space, we're more inclined to trust in greed/graft. To really hit the jackpot, BTC needs to become a preferred asset backing a CB issued stable coin ( a currency, or a bond).

 

Reserve status. For the longest time, the 'City' didn't believe it possible either, but things change; think of it as a evolving process over 5-10 years, with significant chunks corroding off every few years, then a quiet collapse. Greeks, Byzantines, Romans ... all went through the same process, and it looked different for everybody.

 

SD

Edited December 16, 2025 by SharperDingaan

[Dave86ch]

15 hours ago, SharperDingaan said:

 

Most of the BTC demand is from BTC treasuries, BTC ETF's, and sovereign/corporate treasury holdings of BTC vs T-Bills. Falling BTC prices crimp retail ETF demand, and most corporate treasurers would prefer to use BTC options/futures vs buy incremental BTC-ETF. So ... for the BTC price to rise, there has to be NET buying from the BTC treasuries, and a liquidity pump to buy the BTC treasury prefs that finance the incremental purchase. Fed Reserve QE5, and consolidation as the stronger BTC treasuries gobble the BTC holdings of the weaker. 

 

A reserve currency doesn't just collapse, the demise is 'managed' (ie: Pound Sterling); lot of ways it can be done. While the BRICS are using gold to back their currency, most would expect the US to also use BTC as a reserve asset - if only 'cause many don't believe the US has the physical bullion claimed. So much so, that it is wiser to hold physical bullion reserves OUTSIDE of the US, so that it cannot be expropriated. Hardly surprising, when a US signature on a trade agreement is no longer trusted.

 

If the US had the physical bullion; it has very likely already gone to the BRICS vaults, the middle east, and asia. However, while paper gold can be sold at any time, there are real limitations when you're reliant on borrowed gold held abroad.

 

The best defence is restored global trust in US administration, which is no longer practical. When even a Canada is doing everything that it can to reduce reliance on the US market, the writing is on the wall. Not a bad thing overall, but the sun is setting on the empire.

 

SD

 

Bitcoin could be a strategic play for the United States. Given the technological advantage it has, with Tether acting as a spearhead, the U.S. is in a strong position. This also gives those who do not want to depend on China as a source of money the opportunity to achieve self-sovereignty by self-custodying Bitcoin.

 

Tether is working on bringing its stablecoin onto the Bitcoin blockchain, both via RGB and through its recent $8 million investment in the Lightning protocol company Speed