RCIF II - Five bullet Friday - issue #60

  Crypto market sentiment seems to be negative, driven mostly from the price action in the stock market. Stock markets in all countries have been dropping steadily. What is different this time is that we have bond markets and stock markets falling at the same time.

1. Warren Buffett wrote an article in Fortune magazine during the peak of the Dot com bubble. In that he named one macro indicator as his favorite. This indicator is the ratio of the US Wilshire Index market cap divided by US GDP. Roughly speaking, markets are undervalued if the ratio is less than 85%. Fairly valued between 85% to 115% and overvalued above 115%. Currently that index is at 170%.

2. Inflation is surging all around the world. Bond yields are steadily rising, which means that bond prices are steadily falling. What is unique about the situation now is that bond markets used to be a place where investors seek shelter from a volatile stock market, while it is falling. But instead, now both stocks and bonds are falling together. If the year ended today, it would be the worst in history for the US Bond Market with a loss of 10.2%. Entering the year, the 2.9% decline for bonds in 1994 was the largest ever.

3. Market is currently pricing both OHM and KLIMA very irrationally. OHM has $1.3 dollars worth of assets for every $1 worth of OHM tokens. If I simply divide the treasury value of OHM token ($367 million) by the market cap ($282 million) is close to 1.3. OHM recently launched inverse bonds that are purchasing $200k worth of OHM tokens every day. This process should bring the OHM price close to $110 in the next 3 months.

4. We are slowly reducing our YGG position as it is not getting the traction I originally expected. Right now I have converted some of our YGG into ETH, which is better positioned than YGG.

5. KLIMA is now partnering with a company called Aither. This company is the 800-pound gorilla in the carbon offset market. They are responsible for working with 6000 companies around the world in offsetting their carbon emissions. Aither is launching a new token called C3, that enables permission-less bridging of carbon tokens from the offline world into blockchain.

Have a wonderful weekend!

Sam Ikkurty