AllanLOY

News Mixer 📰 | Mythicals Origins 🐉

[AllanLOY @AllanLOY94]

Learning…

[Thax Capital @thaxcapital]

A quick lesson on how ETFs work and how that impacts a $BTC ETF and where you may be wrong!

Background: I worked in Tradfi for 15 years ('06-'21). I got involved in digital assets in 2019 by buying BTC. Since 2021 I've exclusively been involved with digital assets. /🧵

I used to trade a merger arbitrage/special situations and liability book on an institutional trading desk. Some of my BIGGEST wins over the span of my career took place around index events (especially when those index events involved stocks involved in a deal) so I have some knowledge of how "FLOWS" work.

You see, It's ALL about flows. Who's buying, who's selling and WHEN. Years ago, index investing involved a couple of hedge funds and a few prop desks. That's evolved to many hedge funds and many prop desks. Everyone has a model with different assumptions. Index providers provide data to hedge funds and trading desks.... for a fee. That data includes methodology, weighting and total AUM tracking a specific index among others. Hedge funds and prop desks use this information to determine adds and deletes along with associated "flows" based on AUM.

Index providers are EXTREMELY risk adverse. They only care about their benchmark or beating their benchmark through profit sharing agreements. Sellside desks will fight tooth and nail to capture the flow by offering index providers the best deal to beat their benchmark. This also transfers the risk of the event from the ETF issuer to the liquidity provider.

There are set days for announcements from index providers (S&P 500 being the biggest). Leading up to these announcements hedge funds and prop desks will take spec positions in some names they think will be added and some names they think will be deleted. This is basically frontrunning the announcement. Now, over the years these adds/delete estimates have been getting earlier and earlier. Think of it this way. When YOU hear of a stock being added to an index, you're already late. That information is known, and YOU are exit liquidity for hedge funds and prop desks who have WAY more information than you do.

So Thax, how does this relate to the BTC ETF? BTC is UP 75% since the start of September, effectively a few days AFTER the Grayscale ruling. The Bloomberg guys @JSeyff @EricBalchunas have been ALL over the BTC ETF filings and their information has been invaluable. They've had 90% odds of approval for a while now and you can see the reduction in the GBTC spread as evidence of market efficiency.

So where does that leave us? I hear a LOT of "BlAcKrOcK iS bUyInG" on the TL. As I explained this is emphatically incorrect. ETF issuers are only agents for supply and demand. There is a VERY low likelihood of Blackrock or any other issuer for that matter pre-buying their BTC. These "seed investors" are most likely related parties that will hedge their BTC to seed the ETFs. It's quite simple to buy spot and short futures and capture carry. I believe most of these "seed investors" will buy spot and short futures to maintain a $$$ neutral position. The spot BTC wil be used to create shares of the ETF while maintaining a short futures position. Net effect: No net buying.

I believe the BTC ETF will be a sell the news event and expect a pop followed by retracement. Remember, Grayscale holds $26.5B in BTC based on yesterday's close. I believe that 35-40% of the BTC in GBTC is already hedged by arbs. That would drop AUM to ~$15B. Arbs will likely short spot BTC on conversion and buy GBTC. I don't know how much but there will be SOME sell pressure from arbs on the conversion.

Secondly, if you think everyone and their mother is going to rush in and buy BTC at 52-week highs, I've got a bridge to sell you. Prudent money managers will be patient. The flood gates won't open immediately. I'm more interested in seeing the 13-f filings after Q1 on WHO owns the new ETFs. The halving and the subsequent bull run that REALLY starts in Q4 and into 2025 will be where and how to position yourself. Don't get caught up in the endless bull posting you see on CT. As the great John Paulson wrote in "The Risk in Risk Arbitrage" - "Mind the downside and let the upside take care of itself"

Markets ARE efficient. It's been WAY too easy these last few months to feel like a genius when the market has been in a strong uptrend.

Tagging a few folks who I think are on point in the space and who I've benefitted and learned from over the last few years (though I don't always agree with their views). I feel immensely more prepared for what's about to come. THANK YOU @scottmelker @Pentosh1 @cobie @RaoulGMI @ByzGeneral @ColdBloodShill @HsakaTrades @Nebraskangooner @wizardofsoho @TXWestCapital

[AllanLOY @AllanLOY94]

Stay strong everyone.

[AllanLOY @AllanLOY94]

@atitty What a coincidence!
1) Your certificate looks exactly like the sample on Daniel Dus adobe profile, could you be Daniel Dus?

2) And congratulation on obtaining it in Year 2007. You do realise that is written on the certificate in words?

[AllanLOY @AllanLOY94]

@Solana_Emperor $FRED?

[AllanLOY @AllanLOY94]

@freddotsol Wen airdrop

[AllanLOY @AllanLOY94]

Any new memecoins airdrop today?

[AllanLOY @AllanLOY94]

@freddotsol 8Es2CF5ZtQPM5GMzp2712T7skrTCL9RwwZT9x5bHstiQ

[AllanLOY @AllanLOY94]

@IcedKnife What else...
$FRED
Send your wallet to @freddotsol

$SOL

[AllanLOY @AllanLOY94]

@RyseEth Bro its gotta be $FRED
Send your wallet to @freddotsol

$SOL

[AllanLOY @AllanLOY94]

@freddotsol 8Es2CF5ZtQPM5GMzp2712T7skrTCL9RwwZT9x5bHstiQ

[AllanLOY @AllanLOY94]

@freddotsol 8Es2CF5ZtQPM5GMzp2712T7skrTCL9RwwZT9x5bHstiQ

[AllanLOY @AllanLOY94]

The next meme?
@Freddotsol
$FRED
$SOL

[AllanLOY @AllanLOY94]

@witthefanta 8Es2CF5ZtQPM5GMzp2712T7skrTCL9RwwZT9x5bHstiQ

[AllanLOY @AllanLOY94]

@colatonsol 8Es2CF5ZtQPM5GMzp2712T7skrTCL9RwwZT9x5bHstiQ

Lets go ! $COLAT

[AllanLOY @AllanLOY94]

Something to keep an eye on 👀

[Mythicals @MythicalsDrops]

It all started with dragons, but what's your favorite Mythicals creature/drop?

And what would you like to see in the future?

[Mythicals @MythicalsDrops]

If you could design your ideal NFT project, how would it look like?

(Art, utility, WL process, etc.)

Let us know below.

[AllanLOY @AllanLOY94]

https://t.co/LjjZTJwLTm

[oddcow @CowGoesMooon]

Mythics Preview 🧵
(1/4)
-gonna drop on 1st week of july 🤞
-daily 100 mythics release, max collection at 20k
-these previews show promising trait-rich collection

>comment below if i missed out any previews

[AllanLOY @AllanLOY94]

@Airson_liu @fredcoineth 😱