1/ “Bitcoin is better at being gold than gold” - SkyBridge Capital

@Scaramucci 's SkyBridge Capital released their investment thesis for their new Bitcoin Fund LP. They go a step further than other investors in why they are actively choosing bitcoin over gold

A thread 👇

2/ SkyBridge Capital’s main fund, with $9.3B AUM, had invested ~$182M in BTC. In Dec., they announced they were raising a new, separate Bitcoin only fund and already transferring ~$25M of BTC into it

3/ Today they opened to accredited investors w/ min invstmnt of at $50K. This Bitcoin LP won’t trade BUT you only pay 0.75% annual fee and no premium, the portfolio is priced by Bloomberg’s fixed rate (XBT). In contrast, GBTC trades OTC, a 2% yr fee, and a premium to BTC’s price

4/ Their website is a vast library of info. Not just their Offering Memo, pres. & investment thesis. It also includes:
- FAQ videos (Michael Saylor features and Scaramucci has cited him as a major influence)
- Readings on Bitcoin (@real_vijay The Bullish Case for Bitcoin)

5/ Towards the bottom of the page, they also take a dig at GBTC’s premium and offer to walk through a “GBTC swap” to their fund. They understand the hurdles that many traditional investors face in investing into BTC and lean into it

1/ MicroStrategy has announced a $600M convertible bond raise in order to buy even more Bitcoin

How does this compare to their previous offering?
And is this their last?

2/ First, a convert bond starts as a bond then "converts" to equity. The company pays lower interest rates b/c of this potential conversion. Aka the company will pay for it later w/ equity dilution. A company will choose this route if they have bad credit or expect high growth.

3/ In Dec 2020, MSTR announced their first convert bond offering for the explicit purpose of buying Bitcoin. Citi immediately downgraded MSTR to a “sell” recommendation. The market had a much more bullish take

4/ Investor appetite was so strong that MSTR increased the offering from $400M to $550M w/ the option for another $100M. All of this was filled for a total $650M offering

5/ MSTR also priced their bonds insanely low. Interest was 0.75% / yr. Payments were ~$4M /yr for a company w/ an operating income of ~$40M. That's 10x coverage. 2x is considered strong

1/ Who are the investors in GBTC?

Why is there a premium?

And what is the sweet trade they’re taking advantage of?

A thread 🧵

2/ Grayscale’s Bitcoin Trust made headlines again with their record 1-day addition of 16,244 Bitcoin, adding to their stack of over 630,000 Bitcoin and an AUM of ~$23B. Evidently business is good...So who are their investors? And is GBTC’s premium an incentive or disincentive?

3/ What is the Grayscale Bitcoin Trust (GBTC)?Grayscale owns BTC in the trust & investors buy shares to represent a # of BTC. There’s a 2%/yr fee+a “premium.”The premium is the diff. btwn underlying BTC value(Native Asset Value or “NAV”)vs. mkt price of holdings(what shares cost)

4/ There are 2 layers of investors. There are the base layer investors - accredited investors selected to buy into the private placement of the fund at the “NAV” price aka the price of the underlying BTC value

5/ They can send USD or Bitcoin and receive a # of shares equivalent to the BTC value (0.00094919 BTC/share). One catch is its 1 way - Once you put BTC into the trust, it can’t be redeemed. Investors can sell their shares, but the BTC will remain in the trust and off the market