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GM Cryptonary 🐂
Welcome to Skin in the Game where we take transparency to the next level!
As a Research Firm, our goal is to provide you with actionable insights and exceptional tools to guide your crypto journey. We outperformed the market by +10% during the 2022 bear market with Alpha-DAO, now we’re once again upping the ante.
Skin in the Game will be a monthly report dropping on the 25th of every month and we will be sharing exactly how we’re investing $10,000-$100,000 (each month).
Through the reports you will access:
- Our investments with on-chain proof.
- The information and insights that guide our investment decisions.
- View of the market from our eyes.
- Be able to learn from our strategies and mistakes.
We’re not just sharing information, we are sharing our skin in the game.
Disclaimer: Not financial nor investment advice. Any capital-related decisions you make are your full responsibility and yours only. The information made available in this report is NOT for replication. The purpose is to share the thought process behind our decision-making.
Cryptonary’s Investment Approach
Before diving into investments, it is important to define our investment approach and objectives.
We are focused on long-term returns, this means that we target high value investments that we believe deliver outstanding performances over a multi-year timeline. This is the reason we are investing every single month regardless of market conditions. You will seldom see us investing in short-term hype opportunities (not never though).
You will also notice that we develop deep conviction in our investments, meaning we aren’t afraid to double down if price falls. However, with this deep conviction comes absolute freedom to dump assets whose teams are failing to deliver on their plans.
Our objective is simple: O U T P E R F O R M T H E M A R K E T
Investment #1 | Bitcoin ($2,500)
Conviction Level: 60%
No crypto portfolio is complete without some BTC. Afterall, it is the asset that birthed this market. Given our beliefs in the digitisation of capital and that the dollar will fail, Bitcoin is a perfect bet that we will continuously take (monthly DCA).
Thesis
BTC is Gold 2.0.
For the past 2,500+ years, Gold has been the go-to asset for humans. We all consider it an indestructible Store-of-Value (SoV). Times are changing though, most of our lives are now online. The upcoming generations cannot understand how we do not have a digital alternative.
Enter Bitcoin: an easy-to-store, trade, and travel with, alternative for the future of mankind.
Institutional investors have already adopted this view and we’re betting Central Banks (CBs) adopt it next. Meaning we will see CBs announcing BTC holdings sometime this decade. Later on, we’re betting new fiat currencies emerge with BTC backing similar to how Gold was used before 1971.
So yes, given all of these factors, we always want to be BTC owners.
Target ($650,000) | 2030+
Given our thesis on “BTC = Gold 2.0”, it would be fair to assume a similar market capitalisation. We believe the world sees a day where their market caps trade 1:1.
At the moment, Gold has a $12.5T market cap and we bet it rises towards $15T+ given the upcoming de-dollarisation of the world. But for the sake of simplicity, we will work off the $12.5T market cap.
At $12.5T, Bitcoin would be trading at $650,000+ a piece and that is our target.
Of course, there’s the argument that if the world is being de-dollarised, how can we set a target with it? Well that’s the most commonly used method today but a fairer one would be denominating in Gold ounces, in which case our target would be 1 BTC = 345 Gold Ounces (currently 11.8).
Invalidation
Only certain tail-risks can invalidate our thesis, and price going down (even to $10,000) isn’t one of them because our BTC time horizon is for 2030+.
The only three elements that can invalidate our investment and cause us to sell are:
- Satoshi wallets start moving funds indicating a cash out (even if partial) as that would cause mass exodus and panic.
- Regulatory scrutiny incoming from all developed countries in the world announcing an outright ban on Bitcoin.
- Miners starting to shut down their rigs, causing the hash rate to drammatically fall due to decreased profitability.
All three scenarios are highly unlikely, but they aren’t impossible.
Investment #2 | Ether ($2,500)
Conviction Level: 60%
The second asset that should be included in every single crypto portfolio is ETH. The DeFi motherboard and the first network to upgrade Bitcoin’s vision to allow for decentralised applications to exist. To this day, Ethereum maintains majority ownership of the capital invested in DeFi (60%), so yes it is a success.
Thesis
We believe Ethereum is the new Wall Street where all banks, exchanges and lenders move. They’re already seeing their new competitors building hard (you can read more here).
Buying & Staking ETH makes you the new Wall Street landlord.
We’re certainly not going to bet against the financial internet and even less so now that ETH has an improved investment attraction and physique. After the merge and multiple upgrades, ETH has become much more attractive to institutional investors due to an improved economic model and being eco-friendly (you can read more here).
Target ($115,000) | 2030+
When we say Wall Street, we’re kind of lying to you because truth is Ethereum replaces Wall Street, The City of London and every other financial district in the world. However, their real values are unknown which means we have to adopt another methodology for price targeting.
As you know, we believe ETH flips BTC in market cap and takes the top spot. The minimum viable ratio required for that to happen is 1 ETH = 0.175 BTC. Now given, our above BTC target of $650,000, that translates into an ETH price of $115,000 (rounded up).
Invalidation
There are multiple elements that can cause us to sell our ETH, and again price going down isn’t one of them as we have a 2030+ vision. The various elements are:
- Financial Applications migrating towards other base layers, such as Solana, en masse and causing major TVL transfers (50%+ of the network).
- Regulatory scrutiny causing a global ban on ETH. The US calling it a security is less of a problem as it is a single country, while it could have massive short-term effects it wouldn’t be detrimental.
- Consistent network outages after years of uptime.
- Inability to improve the user experience by lowering fees.
…
