Briefly:
Over the weekend the news emerged that the long awaited Mt Gox settlement payouts, which were orginally slated for October 31st, will now commence next month in July.
There has always been a certain amount of FUD around this, as it will bring another 144,000 BTC supply into the market, although as we’ve covered previously. I’m not too worried about it, but the Bitcoin price has been reacting – down now to around $61K.
Recall that our plan with Winland, specifically – was to “sell the news”, but we thought that would be a few more months from now (ideally torqued up by a higher BTC price)
Normally I would even wait, to see if there is any final “blow off” top in WELX ahead of these payouts – but, as it happens, I was doing some more digging into this over the weekend because I wanted to get a better sense of just how many claims Winland was holding.
After reading between the lines of some FRMO transcripts, and re-examining the older interim filings for Winland, my estimate for how many Bitcoin WELX will receive in the payout is now somewhere between zero and 60 BTC.
It’s possible Winland has already “monetized” their claims, altough they’re still carrying them on their books – I’ll explain more in the July letter, which I’m working on this week.
But if they haven’t, I think that the maximum number of BTC Winland will receive will be somewhere around 60 BTC, which will come in around $3 million USD at current pricing – against a current market cap of $23M.
This means the payout isn’t really that much, in terms of an asymmetric trade relative to WELX’s market cap, and given that this is another textbook “sell the news” event, I think it’s time to cash out WELX.
The other company we own with GOX claims is Galaxy Digital, obviously we’re keeping that, because there’s so many other things going on at GLXY – and their claims are much larger (My guess is Galaxy will receive somewhere north of 1,000 BTC and probably HODL them, or use them in their lending operations).
I am going to sell WELX and roll the proceeds into more DEFI.
Coinsnacks recently put out a short report on DEFI technologies, the report contained no accusations of malfeasance, no fraud allegations, the entire thesis is basically that “DEFI is doing too good a job hyping their stock”.
Being good marketers isn’t exactly a crime, so this doesn’t really bother me. DEFI is down close to 50% on the report, combined with general weakness in the space.
I also cashed out my Ether Capital (ETHC) and rolled that into DEFI as well. You may want to keep ETHC now that it is a staking ETF, and cash out your plain vanilla Ethereum ETFs.
I’m underweight Ethereum on this cycle. I may regret it, but I still have a little exposure through the ETFs and some straight up ETH we earned at the biz.
So the takeaways:
- Sell WELX, take profits
 - Take profits on ETHC or keep ETHC as your Ethereum play and cash out straight ETH ETFs.
- Add to DEFIÂ (or anything else you feel underweight on)
- Keep GLXY
The newsletter might be out a day or two late as it’s the holiday weekend (not to mention by b-day) but I’ll expand on the WELX analysis as well as the DEFI situation in there.
That’s it for now.
–markÂ
