Highlights

  • Fake ETF news causing 60m+ in liquidations
  • Bitcoin pumps 30% fueled by shorts and artificial demand
  • SBF was found guilty on all seven charges

Positions

  • 60% Cash, 40% Crypto

Topic 1: Quantum Computing

  • It is hard to estimate exponential trends, but with 1000 qubit quantum computers being planned for this/next year, the Bitcoin quantum breakthrough might be closer than we think (it is estimated ~3000 logical qubits would be the breaking point)
  • Bitcoin WILL need to hard fork to update its cryptography. This will inevitably lead to years of chaos and disagreements (how to handle lost coins, how to migrate coins, what quantum-proof cryptography to use). Nodes will have to reject transactions that are signed the old way (elliptic curve cryptography, which is the primary target for Shor’s factorization algorithm)
  • There will be a pre-quantum chain (unusable and worthless since coins will get stolen) and a post-quantum chain (with <21M supply)
  • We estimate this will result in 30% of coins lost. It’s not a matter of IF but WHEN quantum computing will become a threat and when the hard fork will need to happen
  • 2 “hedges” with disproportionally high upside: Cellframe at 5m mcap, QRL at 10m mcap - once quantum computing emerges as a new hot narrative in the coming years (LK-99 moment for QC), these projects could do 10-100x (similar to how many AI projects performed during the AI hype)
  • https://medium.com/the-capital/an-addition-to-the-bitcoin-wiki-page-on-quantum-computing-and-moscas-theorem-of-risk-f2345e504bb4

Topic 2: Bitcoins 30% pump

  • From our point of view, the only two reasons for the recent pump are to clear open interest (shorts) and to create the fake impression of bullishness surrounding the ETF/halving narrative to fill shorts
  • Highly likely to retrace within a few weeks/months (after the ETF launches and disappoints, and after the halving happens and disappoints)

Topic 3: Best Decision is to Wait

  • It’s likely market makers will use the ETF+halving narrative to fill shorts to dump the price massively in 2024
  • We don’t want to speculate but instead plan ahead for both outcomes
  • Outcome 1: BTC goes to 10-15k - we can accumulate cheaper
  • Outcome 2: BTC goes to 40-50k - we miss some upside but benefit from new liquidity entering markets and many alt opportunities