The World’s Best Trade (Updated)

Published on: October 23rd, 2020

Developing the crypto narrative, Raoul has teamed up with Kevin Kelly of Delphi Digital to demonstrate that there is a seismic shift going on in digital finance and that the risk/reward profile that it engenders is exceptional. By looking both more narrowly at bitcoin but piggybacking on the remarkable developments going on in “DeFi”, Raoul wants to reassert his conviction that this is more than just a trade. It is an epoch-defining opportunity to participate in one of the most anti-fragile systems ever created.

Comments

  • JD
    James D.
    30 October 2020 @ 04:18
    Raoul, can you update what percentage of your portfolio is now in BTC? Previously you said 25%, but a while back you said on Twitter that you're even longer now. "Irresponsibly long" means different things to different people, so a percentage update would help communicate how bullish you are on this trade vs all others.
    • AP
      Aneil P.
      30 November 2020 @ 03:08
      98%
  • WJ
    Willie J.
    31 October 2020 @ 09:56
    I recall getting wrapped up in the crypto speculation frenzy in 2017... every ICO the next big thing, when moon / when lambo building dreams... people taking out second and third mortgages as “this was it”... it is good to see many of the drams promised starting to gain traction - more main stream adoption and the second look and capital allocation from institutions. I still carry some scars from the bubble popping, but buying back the btc i sold at the bottom.
  • JW
    J W.
    29 October 2020 @ 19:48
    Thanks for sharing this report with us - rich content matching the rich set of opportunities :-) In a next update it may make sense to add the brave new world of security tokens (excellent interview w/Stephane de Baets elsewhere on the platform).
  • JF
    Josue F.
    29 October 2020 @ 14:37
    Raoul, do you see yourself at any point completely out of the dollar and all in BTC? I am full in BTC only some cash withdrawn monthly for living expenses? Should I keep more dollars on my side?
  • Yc
    Ying c.
    28 October 2020 @ 13:57
    Hi raoul, are u still long dollars?
    • RP
      Raoul P. | Founder
      29 October 2020 @ 00:01
      Yes...
  • MP
    Marc P.
    24 October 2020 @ 20:55
    Hi Raoul, what would you suggest for a futures options bet on bitcoin ? Is it possible?
    • NA
      Nasir A.
      25 October 2020 @ 04:46
      I just googled and this came up: BTC CME's Bitcoin futures contract, ticker symbol BTC, is a USD cash-settled contract based on the CME CF Bitcoin Reference Rate (BRR), which serves as a once-a-day reference rate of the U.S. dollar price of bitcoin. I think CBOE used to offer it but then pulled the plug, now let's see if they offer again with the new demand.
    • AI
      Andras I.
      25 October 2020 @ 05:13
      Can I ask why you thought about FOPs instead of plain options (ledgerx, deribit..etc)? --- For anyone who is considering BTC futures: I use the CME futures on IBKR (BRR) as I don't want to have another account (or deal with wallets) but still I prefer futures over something like GBTC and I don't think the end of the world is coming to have to hold outright BTC (+ it works better with my usual process). The current and next months are usually liquid enough, further out expirations can have very low liquidity with huge spreads and don't trade too far out (maybe 3-4 months). Also seems like rolling in a contango is not as bad as it used to be, the spread is almost arbitraged to zero nowadays. Downside is margin requirements are much higher than usual futures (I forgot but maybe 40% now?) - so are fees, although when you're buying the minimum 5x contract, it's insignificant ($15 for a 5x$12000 contract = 0.025%)
    • HM
      Harry M. | Real Vision
      25 October 2020 @ 12:29
      Thanks Andras I. that's a useful observation for those of us with IB accounts. Im not in the least surprised the margins requirements are high. Bitcoin is insanely volatile.
    • AP
      Alistair P.
      28 October 2020 @ 09:38
      The IB margin requirements on the short side are also something to behold.
  • AP
    Alistair P.
    28 October 2020 @ 09:36
    The first half is a compelling narrative, despite some dubious assertions on the charting front. As for the second half I have no idea, because I did not understand 90% of it. I feel like a glossary, probably almost as long as the piece itself, might help somewhat.
  • MS
    Mark S.
    24 October 2020 @ 15:37
    Really glad for this write up and hope it continues. Lots to digest. Thanks to Raoul and Kevin for an excellent effort. One thing I don't understand (and there are many) regarding NXM the price currently is around $28. But the Capital Pool size is $81K which according to the Bonding Curve Model chart should make NXM in excess of $39. So I don't understand this. What's the point of the model if it is not accurate to what it predicts? Does Kevin have an explanation?
    • KK
      Kevin K.
      27 October 2020 @ 15:40
      Hey Mark - glad you enjoyed the write up. NXM's price is primarily a function of the MCR (in ETH) and the MCR% (size of the capital pool / minimum capital requirement). It's also important to note the bonding curve formula prices NXM relative to ETH, so fluctuations in the latter will impact the price of NXM (see formula below). NXMETH = a + (MCReth / c) * MCR% ^ 4 Using the bonding curve price formula above, we find this price of NXM to be 0.068 ETH: NXMETH = 0.01028 + (162,425 / 5,800,000) * 119.8% ^ 4 = 0.068 ETH. ETH is current trading ~$403, giving us an NXM value of ~$27.40. You can also track these inputs in real-time here: https://nexustracker.io/capital_pool Hope this helps!
  • RR
    Raj R.
    26 October 2020 @ 20:05
    Arent both trades highly correlated? Does it make sense to pick one over the other? I dont see why would one want to be in both trades? @Raoul, what would be a good rationale to be in both trades?
    • RR
      Raj R.
      26 October 2020 @ 20:06
      Sorry this comment is for a different trade recommendation. Please ignore.
  • NA
    Nasir A.
    25 October 2020 @ 04:48
    Good stuff, will have to read it couple of times to digest. Great write up.
  • TK
    Tom K.
    24 October 2020 @ 18:53
    Really appreciate you sharing such quality information with us Raoul. Thank you.
  • ML
    Michael L.
    24 October 2020 @ 07:00
    Many thanks Raoul and Kevin. Great quality and very insightful, as always (in particular for members trying to get their heads around the space!). Have have had a first pass through, going to take a couple reads through to digest but very timely and helpful, just what was needed! Pass the fire hose this way! 🤣 Cheers
  • AC
    Adam C.
    23 October 2020 @ 18:49
    I've been watching DeFi from a distance, but haven't participated yet. So much to digest here.... Love it. Give me more of the fire hose!