blothecap

Market-neutral crypto vaults | Live: Edge & Hedge on Hyperliquid and Lighter | TVL: $3.7 Million | Public performance and risk updates | NFA

[blothecap @blothecap]

We published this article a while back predicting hyperliquid:native price at $105 based on buybacks and burns.

The reason its easier to sell hyperliquid:native to wall street is because of its structured buybacks and burns, you can build models such as these to value the token.

The point is not that our model is accurate, the bigger point is you can build models like these to price the token. Do give it a read if you have time.

https://t.co/VVu9x0o6TT

[blothecap @blothecap]

If you know, you know!

[blothecap @blothecap]

Solana has been flipped!

[blothecap @blothecap]

Access! A large part of the world doesn’t have easy access to these assets due to government policies on money control. One of the biggest examples would be India. Onchain RWAs can solve this problem. Regulation would still be an issue but they might generate enough value to the users by the time regulators catch up. And by the time they catch up they might be too late :)

[blothecap @blothecap]

@_LetMeDo_ Try https://t.co/dsEOIpyVRS. Its superb. Helps you build portfolios on themes.

[blothecap @blothecap]

Yesterday was one of those days when the market was reacting not merely to price, but to a change in belief.

Bitcoin has always occupied a unique position in crypto. It is the asset the rest of the market looks to for direction, the closest thing the industry has to a reserve asset, and for the last several years one of the strongest pillars supporting its institutional narrative has been Strategy, formerly MicroStrategy. Michael Saylor did not just buy Bitcoin; he built an entire corporate identity around the idea that Bitcoin was the ultimate treasury asset, something to accumulate permanently rather than trade opportunistically. Strategy became, in the eyes of the market, the infinite bid: the buyer that would keep raising capital, keep accumulating BTC and, most importantly, never sell.

That is why the disclosure that Strategy sold 32 BTC mattered far more than the size of the sale itself.

Thirty-two Bitcoin is almost irrelevant against a holding of more than 843,000 BTC. It is not enough supply to explain a major move in price, and it would be simplistic to argue that this transaction alone caused Bitcoin to fall. But markets often care more about the breaking of a narrative than the immediate economic impact of the event that broke it. Until now, the market could treat Strategy’s Bitcoin holdings as effectively removed from supply. The moment Strategy sold even a small amount of BTC to meet obligations created by its own capital structure, that assumption stopped being absolute.

The important shift is that Strategy can no longer be seen only as a source of demand for Bitcoin. It is now, at least conditionally, also a potential source of supply.

That is a meaningful change because the company has become one of the largest and most visible expressions of institutional conviction in Bitcoin. A structure that looked highly supportive while capital was flowing in can begin to look different when its obligations require liquidity. The issue is not that Strategy is suddenly about to liquidate its Bitcoin holdings. There is no evidence of that. The issue is that the market has now been reminded that even the strongest holder of Bitcoin operates within financial constraints.

This came at an already fragile moment for crypto. Bitcoin fell sharply, and as usually happens when BTC weakens, much of the broader market followed. Confidence was already thin; the Strategy sale gave investors one more reason to question a narrative they had previously treated as almost unquestionable.

Yet market-wide stress is also when relative strength becomes most visible. When everything is rising, it is difficult to distinguish genuine strength from general liquidity. When Bitcoin is falling and most of the market is being sold indiscriminately, assets that hold up or continue to attract demand become far more interesting. In this sell-off, $HYPE stood out. While BTC was under pressure and much of crypto moved lower, HYPE continued to show unusual resilience, trading near record highs rather than simply following the market down.

That distinction matters for how we think about the vault. The objective of a market-neutral strategy is not to correctly predict whether crypto as a whole will go up or down on any given day. It is to identify where strength persists and where weakness is emerging, while limiting the portfolio’s dependence on broad market direction.

Over the last 24 hours, the market declined by roughly 5–6%. Our vault was not completely immune to the move, ending the period down approximately 1%. But in a market where Bitcoin led a broad drawdown, limiting losses to a fraction of the market decline is precisely what the strategy is designed to do.

The most important takeaway from yesterday is not simply that Bitcoin fell, or that one asset outperformed. It is that markets can reprice long-held beliefs very quickly. Strategy’s sale was small in size, but large in symbolism. At the same time, the sell-off helped reveal where genuine relative strength may be emerging.

In markets like these, capital protection and selectivity matter more than blind exposure.

[blothecap @blothecap]

@mdudas Crypto is back! 😂

[blothecap @blothecap]

This is my quant!

Thinks (raising at $3-4 Trillion) = (raising $3-4 Trillion)

[Kai @kai_xbt]

Pelosi Tracker founder Chris Josephs says the 3 massive IPOs coming are going to liquidate the entire stock market

"Anthropic is about to IPO, SpaceX is about to IPO, and OpenAI is about to IPO. There's never been that much money. They're going to need to raise $3-4T in total. Where's all that money going to come from?"

"What's going to happen is these three IPOs are going to liquidate the entire other stocks and retail is going to get screwed. All the companies that the hedge funds made money in, they're going to have to sell out of. Things like Micron, Nvidia, to invest in these new companies. There's not enough money. Everything is going to fall 10-15% after."

[blothecap @blothecap]

Why vaults make sense, while copy trading often does not

The promise of on-chain copy trading is seductive. If every wallet is visible and every trade can be tracked in real time, then investors should be able to identify successful traders and simply replicate what they do.

But visibility is not the same as replicability.

Loracle’s recent HYPE trade is a useful example. Anyone monitoring the wallet could see the headline position: a very large leveraged short on HYPE that moved sharply against him before being exited. From the outside, it looked like a trade that could be copied with a few clicks. Open the same short, use similar leverage, and participate in the same view.

Except that this would not have been the same trade.

Loracle also held substantial spot HYPE while the short was open, and moved significant spot holdings while managing the position. That context changes the meaning of the short entirely. A short held against a large spot position may be a hedge, a reduction in net exposure, a temporary risk-management decision, or a vehicle for managing liquidity while unwinding the broader portfolio. The visible perp position tells you almost nothing about the portfolio objective behind it.

This is the fundamental weakness of copy trading in leveraged markets. It encourages investors to replicate actions while remaining blind to the balance sheet that made those actions rational.

A follower could copy Loracle’s short, but would not automatically inherit his spot exposure, his available collateral, his ability to reduce another leg of the portfolio, his liquidation tolerance, or his time horizon. If the market moved sharply higher, the original trader could manage the trade in the context of his full portfolio. The copier might simply be holding a naked leveraged short in a smaller account, with no hedge and no capacity to survive the same drawdown.

Both accounts could appear to hold the same position. Economically, they would be taking completely different risks.

This is why the usual copy-trading interface is misleading. It treats the position as the strategy, when the position is only the most visible expression of a strategy. In leveraged markets, outcomes are determined not only by whether the trader was eventually right or wrong, but by collateral, margin, rebalancing, financing, hedges and the path prices take before the trade is closed.

A trader can be early and survive. A copier can be early and liquidated.

Vaults address this problem more coherently, provided they are designed to contain the full strategy being advertised. An investor in a strategy vault is not looking at an external wallet and attempting to recreate trades in a separate account. Their capital sits inside the managed portfolio itself. When the portfolio adds a hedge, reduces exposure, moves collateral or realizes a loss, the investor participates in that same portfolio decision and the same resulting PnL.

That does not make vaults safe. A poorly designed vault can lose money. A bad manager can still make bad decisions. A strategy can still hide risks that investors misunderstand. And a vault that cannot actually trade all required legs of a strategy cannot honestly claim to reproduce it.

But a transparent vault solves a problem that copy trading cannot solve: alignment at the portfolio level.

This distinction matters as on-chain asset management grows. A wallet leaderboard can show attractive historical returns and visible open positions. What it cannot show is whether copying one of those positions gives you the trader’s actual exposure or merely the most dangerous fragment of it.

The future of on-chain investing should not be built around following wallets trade by trade and hoping the missing context does not matter.

It should be built around transparent strategy vaults where investors can see what the strategy is allowed to do, understand the risks they are taking, and participate in the actual portfolio rather than an imitation assembled from public transactions.

Copy trading gives you the position.

A good vault gives you the strategy.

[blothecap @blothecap]

@sue_xbt Trump 😂

[blothecap @blothecap]

@HYPEconomist Some pretty good vaults out there to take this trade. Unfortunately ours is not one of them 😒

[blothecap @blothecap]

@lzminsky @Kalshi Very very nice! I cannot stress enough how valuable prediction markets can be to hedge out risks while investing in companies

[blothecap @blothecap]

Trading is great, but nothing beats spending a chill Sunday with this guy 🙃

[blothecap @blothecap]

So was Darvas a trading genius?

Or was his greatest skill building a legendary story around a good method?

The exact profit remains contested.

But the question he forced traders to confront still holds:

Would you rather be right about a stock — or be in one that is actually going up?

[blothecap @blothecap]

In the 1950s, a professional dancer claimed he made over $2 million trading stocks.

No Bloomberg.
No trading desk.
No live charts.
He placed orders by telegram while touring the world.
Then regulators tried to prove his story was fake.

This is Nicolas Darvas.

[blothecap @blothecap]

Nicolas Darvas may be remembered as the dancer who claimed he made $2 million in stocks.

I think the sharper story is this:

He became a better trader when he got farther away from market noise.

No constant opinions.
No emotional overtrading.
No need to be early.
Just strength, confirmation, risk control and patience.