The Cryptocurrency Trading Journal

Daal said:
https://twitter.com/x/status/1378210798435061766

https://cointelegraph.com/news/silent-crash-as-price-floors-collapse-across-nft-space

Good article on the NFT crash
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Can confirm, the prices on Nifty gateways are also way down. The Jose Delbo I purchased is about half of what I paid (lowest selling price, but have not sold)

My other NFT's are also down from the high, but still in profits, except 1 is close to break even. Again these are based on lowest selling prices but does not mean those lowest selling prices will sell any time soon or if there will be someone that will list at even lower prices.

NFT's are not liquid
 
m22au said:
Daal, I'm having a look at Galaxy Digital (https://www.elitetrader.com/et/posts/5359264/), and I see from their most recent quarterly numbers a big gain in "Net realized gain on digital assets".

Are you still holding the stock?
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Yes. Its been a great performer but I worry I might hold it for too long. I'm having a hard time valuing it.
The numbers I was able to get it from it last week were:

7.7B Market cap

1.4B assets

850M digital assets (400M BTC)
260M investments (70 investments in 50 portfolio companies)

372M liabilities

1.1B equity
------------

Its the 'investments' part that is hard to value. They own shares, preferred stock, bonds, tokens in many crypto companies. So its like a VC fund, but it doesn't appear to be marked to market. If they hit a home run there their stake can be worth a lot. They are also getting into the ETF business and could be a pretty big name in 5 or 10 years. MS is also doing business with their OTC desk, and looks like GS is as well. This is a completely open ended situation where maybe even Novogratz doesn't know how valuable his company will be
So I dont know when to sell. Maybe I will trim it a little weekly but hold most, until I get bearish on crypto, at that point I will sell it all and try to buy it again when everything crashes. But I imagine if crypto is the future, I dont see why this company can't be worth $100B one day (say, 5-10 years from now)
 
A few years ago I was listening interviews from the stock investor Monish Pabrai and he talked about certain indian stocks where he knew they were going to be 50x 100x type of companies and all he had to do was to buy and forget about them. It feels like Galaxy is one of these companies, in hindsight of course

Unfourtunately, the trader in me sold a decent chunk at 2/3/4/5/6. But then I stopped and added some at 10. Now I'm just holding. But its crazy to think about that I put in $20K CAD into this and had I done nothing, the stake would be worth $600K CAD. But it was an important mistake for me to make, because I learned that one of my flaws in crypto is taking too many profits. That lead me to lock some of my bitcoin and ETH, making it impossible for me to sell
 
Daal said:
Yes. Its been a great performer but I worry I might hold it for too long. I'm having a hard time valuing it.
The numbers I was able to get it from it last week were:

7.7B Market cap

1.4B assets

850M digital assets (400M BTC)
260M investments (70 investments in 50 portfolio companies)

372M liabilities

1.1B equity
------------

Its the 'investments' part that is hard to value. They own shares, preferred stock, bonds, tokens in many crypto companies. So its like a VC fund, but it doesn't appear to be marked to market. If they hit a home run there their stake can be worth a lot. They are also getting into the ETF business and could be a pretty big name in 5 or 10 years. MS is also doing business with their OTC desk, and looks like GS is as well. This is a completely open ended situation where maybe even Novogratz doesn't know how valuable his company will be
So I dont know when to sell. Maybe I will trim it a little weekly but hold most, until I get bearish on crypto, at that point I will sell it all and try to buy it again when everything crashes. But I imagine if crypto is the future, I dont see why this company can't be worth $100B one day (say, 5-10 years from now)
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Thanks for your feedback.

Interesting to hear that you have the market cap as 7.7B Market cap, because Yahoo Finance has it at only 2.9 billion CAD. Assuming your figure is correct, this is (another) example where finance web sites (not just Yahoo Finance) are unreliable and/or out of date with their market cap figures.

Admittedly I have not spent too much time looking into the company (you obviously know it much better) but having the vast majority of its revenue in the generic category of "Net realized gain on digital assets" makes it a bit difficult to analyze. I would hope/assume that further detail is available buried in the financial statement notes.
 
m22au said:
Thanks for your feedback.

Interesting to hear that you have the market cap as 7.7B Market cap, because Yahoo Finance has it at only 2.9 billion CAD. Assuming your figure is correct, this is (another) example where finance web sites (not just Yahoo Finance) are unreliable and/or out of date with their market cap figures.

Admittedly I have not spent too much time looking into the company (you obviously know it much better) but having the vast majority of its revenue in the generic category of "Net realized gain on digital assets" makes it a bit difficult to analyze. I would hope/assume that further detail is available buried in the financial statement notes.
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Yes its confusing. I had to email IR to understand it. They said that bloomberg gets it right. As of right now, Bloomberg had a almost $10B CAD market cap for it.
 
Galaxy also told me
"
Thank you for the note. The last page of our Q3 earnings presentation (link here) provides an overview of Galaxy’s corporate structure, share count, and market cap.


The Class A units are publicly traded on the TSX and the Class B units are held by founders and employees. The number you are referencing below does not include the Class B Units."
 
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Bitcoin has a tendency to make some really strong parabolic waves before its spectacular 80% crashes. I identified these waves by looking at "stable" periods right before surges that lead to big crashes. There wasnt some quantifiable rule for that, I just sorta used my trader judgement to see what a parabolic wave was like

Historically I was able to identify these, I rounded the figures to make it easier:

4/11/2011 - $0.77
6/8/2011 - $29.6

38X over 2 months

2/25/2013 - $30.4
4/9/2013 - $230

7.5x in 1.5 months

10/14/2013 - $133
11/30/2013 - $1124

8.5x in 1.5 months

11/14/2017 - $6598
12/16/2017 - $19343

3x in 1 month

As the market has become more liquid and mature, it appears that these waves have become smaller and more controlled. This time around, its possible it will be even more muted, specially given hundreds of billions of dollars will be needed to move BTC. and perhaps institutions will be more price sensitive vs retail investors. If that is so, perhaps a 2x in 2-4 weeks will be alll that is needed to trigger a large correction and bear market. The key, is that the 2x has to happen in a late stage market (that can be confirmed by other indicators). Obviously a 2x at the start of a bull cycle of the in the middle means nothing

Given that, here are some scenarios:

A) The stable period before the fast parabolic move happened in the last few weeks. If that is so, BTC will surge to $120-$150K and then crash
B) We are still in the stable period (meaning mid stage cycle) and the parabolic has not started. If that is the case, we will see BTC grind back and forth to perhaps $80-$100K and then start to go parabolic
C) We are in a different regime where institutions (with quarterly rebalancing) dominate the market and we will not see anything like what happened historically happen again. If that is so, I expect a slow grind to $130K, with lots of back and forth
D) Something else is going on that I'm missing

So far, the indicators I'm looking at are not indicating we are at late stage but indicators are nothing but econometrics, which are SUPER error prone when dealing with markets predictions. So, at the end of the day, its all a probabilistic assesement

I think there is a 50% probability we are at a mid-stage bull cycle, 35% at a late stage bull cycle and 15% at an early stage bull cycle.

If BTC does a 1.5 to 2x from here in a small period of time, than, as a matter of prudence I will have to start to bank some profits. Certainly not all but some because there is the chance we are in a late stage. Furthermore, in 1-2 months that mid-stage will start to become more like an late-stage cycle given the passage of time and increase in market capitalization so prudence is warranted

anyways, these are my thoughts for now
 
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