Author: admin

It takes ~10 days to liquidate the largest BTC seizure

In mid October, DOJ seized ~$15bn, or 127,271 BTC, from Cambodia-based Prince Group / Chen Zhi. It’s the largest crypto seizure in DOJ history.

How many days it would take to liquidate these BTCs?

Daily volume looks to be ~300-500k BTC.

If limit to 3% of daily volume, that is ~12k BTC per day. Then it would take ~10-11 days if US gov were to sell off 127,271 BTC.

Previously, ~69k BTC was seized in November 2020 from a long-dormant Silk Road wallet.

US gov has been authorized to sell the entire stake in 2025.

Other BTC seizure and result:

MSFT, Alphabet, Meta, Amazon all expected further increase in capex

What you are seeing in 3q25 capex spending…

What you are hearing from mgmt.

MSFT – “now expects capital investment growth in fiscal 2026 to exceed that in fiscal 2025”.

Alphabet – “expect significant increase in 2026 capex” / 2025 capex to be in a range of $91 billion to $93 billion” vs $85 bn guided in 2q25.

Meta – “capital expenditures would be notably larger in 2026 than 2025”. / 2025 capex to be $70-$72 billion vs $66-72 billion guided in 2q25.

Amazon – “we expect our full-year cash CapEx to be ~$125 billion in 2025, and we expect that amount to increase in 2026” vs ~$118bn guided in 2q25

 

 

BTC price and AI data centers

One important movers in 2025 for BTC is the power-hungry data centers in the US.

Those data centers draw bitcoin miners away. Essentially, the power is so scarce that miners’ power supply is bought out by AI data center guys.

What happens to bitcoin price (and supply & demand)?

When miners drop/quit, bitcoin networks’s hash rate drop. Hash rate positively correlates with BTC price.

Source: https://newhedge.io/bitcoin/hashrate-vs-price

Meanwhile, as AI eats power, energy prices are higher. Ceteris paribus, miners’ operating cost rises and thus they will need to sell more bitcoins into the market.

Robots should be capex?

Technically, capex should be more one-off than recurring.

Phone used to be a “capex” item. You won’t buy a phone every other year, before the iPhone era. Apple’s P/E multiple expanded when it transformed the category into a more “recurring business”.

In the early stage of AI training, people spend whatever is needed on chips capex. This is due to the increased performance of AI GPUs and thus the efficiency of training. However, after this growth era, I think this is still more of a “capex” item thus the growth should normalize later. Inference is another thing though.

Robots should be capex ultimately. However, in the initial adoption stage, which hasn’t arrived yet, we should see a growth that makes people forget this is a capex category. Then there will be a period of doubt, like when Buffett purchased Apple. And hopefully, the leading robot company by then can transform robot into a “recurring” category like Apple did for smartphone.

 

Is it like internet bubble?

The dot-com bubble burst in March 2000, despite being called a bubble for quite some time. Indeed, the legend Tiger Management lost a lot shorting this intern bubble and handed money back to LPs in 2000.

What happened? What defining elements mark the peak?

Here are the three important events back then:

1/ March 20, 2000 – Barron’s Burning Up article

2/ March 21, 2000, Fed hiked another 25bp to 6%; hiked to 6.5% in May 2000

3/ Apr 3, 2000, “Conclusions of Law” released; Judge Jackson ruled Microsoft violated the Sherman Antitrust Act (Sections 1 & 2)

Where are we now?

For (1), actually there are many more warning before bubble burst, through 1998-1999. So if people say the FT illustration of $1tn OpenAI deal and The Information article of Oracle losing money on Nvidia chips will lead to the bubble burst, I don’t think so.

Fed – we are still in rate cutting cycle.

Gov regulations – not seeing any real destructive rules.

Party is still on.

Stay stunned.

亚洲的赌性 Asian’s appetite for gambling

If the majority of a game’s participants are keen to gamble, they may push the risk/reward of the game to a negative territory.

If this game is the stock market, you may observe the valuation as not attractive at all.

What’s worse, as a whole, these participants collectively are more likely to lose in the long run!

The game designer or host must be very happy though.

Gambling is all over the world, but why Asians are more vulnerable to gambling?

Probably due to the slim chance of a normal enjoyable life.

Chinese consumers and Chinese cultural products

From Black Myth: Wuong last summer, to Labubu, to Ne Zha 2 this year, Chinese cultural products are making amazing progresses.

They make records in different categories:

Black Myth: Wukong is widely regarded as the first successful AAA game from the Chinese video game industry, and is “one of the fastest-selling games of all time“.

Labubu is a fashion toy that is popularizing across the world.

Ne Zha 2 is an animated film, and is the highest-grossing animated film globally and the highest-grossing film in China.

They are all very successful in China.

They are not all very successful globally – Ne Zha 2 didn’t resonate a lot with the ex-China market. It is made for the Chinese market.

Black Myth: Wukong is made for global markets and it does resonate with gamers globally, but the appealing is less so for ex-China market. Chinese gamers who know the novel (nearly everyone) would enjoy it more.

Labubu doesn’t have a target audience in mind. It’s a “fashion” that can be even more popular in certain regions ex-China than China.

Their importance are different.

Ne Zha 2 and Black Myth: Wukong are in traditional industries. They can be considered the “best ever” for an average Chinese consumer for has never been exposed to global cultural products; but on a global standard, they are not significantly better than other cultural products.

Labubu is more in its own game.

Btw, both movie and games are regulated in China. But toy is less regulated.

On IP ownership: both Ne Zha 2 and Black Myth: Wukong borrowed IP from traditional Chinese tales. Labubu IP is created contemporarily and is owned by the company.

 

Is pharmaceutical and biotech industry “technology”?

My rule of thumb is that technology is deflationary.

Via technology improvement, people get more for the same price.

This is evident in chip technology, where the same amount of money buys you  newer chips with better performance each year. It’s more obvious when you notice that the “best” chips of previous years will always cost less if you wait.

It’s not always the case in other industries.

The same can of coke will cost you more over the years!

Pharmaceutical and biotech can be technology.

One example is the genome sequencing cost, which has dropped significantly.

Over the years, a drug normally will see its price drop significantly, thus patients shall pay much less for the exact same product.

However, during the period of a few years, drug price may increase, before the price erosion. This period is coke-like.

Why $1 of bitcoin is worth $2 in stock market

Matt Levine explained why $1 of bitcoin is worth $2 in stock market.

Read the article here:

A Bitcoin in the hands of a crypto treasury company is really worth more than a Bitcoin in your hands, because the treasury company can do stuff (investor education! lending! leverage! staking! tokenization! stuff!) with the Bitcoin that you could not easily do. Therefore the premium is justified for business reasons.

There are vast pools of institutional capital that (1) want to own Bitcoin but (2) can’t own Bitcoin directly, or through futures or exchange-traded funds or other more normal (and lower-premium) mechanisms. Therefore the premium is justified for market-segmentation reasons: Crypto treasury companies are getting paid a durable premium for bringing crypto to institutional investors in investable form.

Retail investors are lazy and/or confused and buy hyped crypto treasury stocks without understanding the enormous premium they are paying for crypto exposure. Therefore the premium is justified for meme reasons.