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KAOBOY MUSINGS and its associated podcast KAOS THEORY focus on the intersection of Financial Markets, Macroeconomics and Geopolitics. I've spent 30+ years as a trader/hedge fund manager and now manage money for my family office across many asset classes.

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* Crypto/BTC Substack Directory *

Michael Kao

Jul 12, 2023

5/21/21 - Re: Mental Models-Bubble Assets As Capacitors.

Re: Mental Models-Bubble Assets As Capacitors.

Michael Kao

May 22, 2021

Re: Mental Models-Bubble Assets As Capacitors.

I mentioned that there many examples of “Financial Hernias”: “Bubble” assets that have benefited most from low/neg risk-free rates and too much EXCESS LIQUIDITY: Crypto, NFTs, SPACs, high tech stocks/stonks, etc. The problem with the “Hernia” Mental Model is that Hernias are injuries resulting from excess pressure. In financial markets, the injury comes …

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6/17/21 - Re: Crypto/BTC-GS Insight Highlights.

Re: Crypto/BTC-GS Insight Highlights.

Michael Kao

June 17, 2021

Re: Crypto/BTC-GS Insight Highlights. GS just published a 50-page thought piece entitled “Digital Assets: Beauty Is Not in the Eye of the Beholder.” My highlights follow. (THREAD) It’s a comprehensive piece on the entire crypto ecosystem, but what I found most interesting was the valuation discussion.

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6/20/21 - Re: Crypto/BTC-Supply/Demand & The “Tantalus Tease.”

Re: Crypto/BTC-Supply/Demand & The “Tantalus Tease.”

Michael Kao

June 20, 2021

Re: Crypto/BTC-Supply/Demand & The “Tantalus Tease.”

Much ado is made about the scarcity of supply of BTC. The 3 main sources of supply inelasticity are: 1) mathematical scarcity (21 mm coin limit), 2) HODL effect, 3) permanently lost coins. The mathematical construct seems ingenious in that it was engineered specifically to beat even gold’s high stock-to-flow ratio, as defined by “stock” of existing suppl…

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9/27/21 - Re: Crypto/DeFi—Cherry Popped, First Impressions.

Re: Crypto/DeFi—Cherry Popped, First Impressions.

Michael Kao

September 27, 2021

Re: Crypto/DeFi—Cherry Popped, First Impressions.

I’ve been reading/studying this topic for quite some time, but to extend the analogy, there is no substitute for doing.😎 My motive to do this was 100% to learn about DeFi and 0% to speculate in this stuff, so my transactions were actually meant to incur slippage to see what it was like. And boy was there slippage — in both time and $.

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1/30/22 - Re: BTC/Oil/USD/MSTR-Tying It All Together & The “Ummwut” Umwelt.

Re: BTC/Oil/USD/MSTR-Tying It All Together & The “Ummwut” Umwelt.

Michael Kao

January 31, 2022

Re: BTC/Oil/USD/MSTR-Tying It All Together & The “Ummwut” Umwelt.

Last year I got captivated by octopuses (these things happen) and read several books on cephalopod consciousness, and an interesting word caught my eye: “Umwelt.” “Umwelt”: “the world as it is experienced by a particular organism.” For instance, it is hard for us vertebrates to envisage the umwelt of an octopus that has invertebrate, distributed intellig…

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2/21/22 - Re: BTC/Crypto-Playing Jenga With The Ouroboros.

Re: BTC/Crypto-Playing Jenga With The Ouroboros.

Michael Kao

February 22, 2022

Re: BTC/Crypto-Playing Jenga With The Ouroboros.

This thread delves a little deeper on these issues, buttressed by similar thoughts from JPM’s Michael Cembalest, for whom I have the deepest respect as an independent thinker. I borrow some exhibits from Cembalest’s recent piece entitled “The Maltese Falcoin.”

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5/3/22 - Re: MSTR-The Tail Wagging The $BTC Dog?

Re: MSTR-The Tail Wagging The BTC Dog?

Michael Kao

May 4, 2022

MSTR just reported Q1'22. Here’s an updated capital structure: Debt: Silvergate SOFR+3.7% due 3/23/25 -- $205 mm Senior Secured 6.125% due 6/15/28 -- $500 mm Convert 0.75% due 12/15/25 -- $650 mm Convert 0% due 2/15/27 -- $1050 mm TEV: Total Debt -- $2405 mm

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5/16/22 - Re: BTC/Crypto: The Beginning of the End of the Liquidity Lottery.

Re: $BTC/Crypto: The Beginning of the End of the Liquidity Lottery.

Michael Kao

May 17, 2022

Re: $BTC/Crypto: The Beginning of the End of the Liquidity Lottery.

I’ve already written at length about BTC/Crypto valuation in several threads. You can find a directory of them here:

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3/26/23 - Re: Inflation/USD/USTs – “Risk-Free” Riskiness & Austrian Pipe Dreams.

Re: Inflation/USD/USTs – “Risk-Free” Riskiness & Austrian Pipe Dreams.

Michael Kao

Mar 26

Re: Inflation/USD/USTs – “Risk-Free” Riskiness & Austrian Pipe Dreams.

In recent weeks, I have read many incorrect and misleading takes on Twitter by folks who are decrying recent interest rate volatility as some kind of “false advertising” of the term “Risk-Free” when it comes to US Treasury securities (USTs). These takes go something like this:

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