Crypto Three Things (9/12)

Monday, Sep 12th 2022

Commentary

FTX buys 30% of SkyBridge

 “A champion is afraid of losing. Everyone else is afraid of winning.” ―  Billie Jean King


1) FTX buys 30% stake in SkyBridge: Sam Bankman-Fried's investment firm FTX Ventures announced it had taken a 30% stake in Anthony Scaramucci's SkyBridge Capital – a hedge fund that has pivoted toward digital assets. Details around the deal were not disclosed, but SkyBridge said it would use $40M of the proceeds to scoop up cryptocurrencies and hold them as long-term investments on its balance sheet.

Titan's Takeaway: The deal adds to a growing portfolio of Bankman-Fried's salvaged crypto firms that have struggled through the market sell-off. Let's see if the billionaire financier, who Scaramucci likened to a modern-day JP Morgan, will earn his stripes.

2) MicroStrategy to renew BTC buys: Software development firm MicroStrategy, which has turned into the largest corporate buyer of Bitcoin, filed with the Securities and Exchange Commission to sell as much as $500M in class A stock. "We may use the net proceeds from this offering to purchase additional Bitcoin," the company said in the filing. MicroStrategy owns just under 130K Bitcoin at an aggregate purchase price of $3.9B. 

Titan's Takeaway: While this looks like another case of 'buying the dip,' we hope that the firm, currently staring into a $1.2B loss on its BTC investment, will not get buried under its heavy debt as it desperately tries to dollar-cost average.

3) Algorand has $35M in Hodlnaut: The Algorand Foundation revealed it has a $35M exposure in USDC to Hodlnaut – the Singapore-based crypto lender that suspended withdrawals a month ago. Algorand said the figure represents less than 3% of its total assets, adding that it will pursue all legal remedies to recover as much as possible of the allocated capital.

Titan's Takeaway: The newly-discovered victim in Hodlnaut's fallout is a reminder that the crypto market rout continues to ripple through the industry. It is also an example that high-yield promises often become painful lessons. 

As of this writing, BTC was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.
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