The dangers of leverage, $NAKA edition: The company has $210M in debt to Kraken paying 8% APR backed by most of their Bitcoin stash, or 4405 BTC. This loan is due in December and as BTC price lowers, their Loan-to-Value ratio gets worse and worse. At $63,500, they're at 75% LTV At $59,600, they're at 80% LTV At $56,000, they're at 85% LTV They have a little bit of dry powder left, about 650 BTC that are not pledged to the loan, but they need it to service the 8% interest and the shortfall between revenue and expenditures (particularly executive salaries). Historically, they've tried to hover around 70% LTV, suggesting that the liquidation price isn't too far away from that. So to sum up, there are many ways for this to go wrong: 1. Bitcoin drops enough where they get liquidated ($50k would certainly do it, probably something higher would also do it) 2. BItcoin stays down until December and they can't roll over the loan. 3. Bitcoin stays down until December and they roll over the loan on punitive terms that reduces their stack quicker than they are now. They would likely have to sell some Bitcoin because they're not getting $210M in loans in this scenario. There's really only one way for things to go right: Bitcoin price goes up massively by December. Even then, the interest payments and operations expenses will likely destroy a ton of value. The lesson here isn't to dunk on the company. It's just showing you how fragile leveraged positions are. You can have the world's most pristine asset and still lose if the market moves against you.

The thing about fighting on the internet is that you typically reveal your biggest insecurities by how you attack. Peace is a privacy necessity.

Refuse to be monetized.

Most of the process of maturing is lowering your time preference.

If the last 24 hours has taught me anything, Nostr can, like me, live on beef.

Free issue for the first Monday of the month! Why China Can't Build Jet Engines, The Fail-Lib Plague, Rancher Loses Everything to Big Beef, Feminism and Civilizational Collapse (1934 Study), Physical Media as Self-Custody, NixOS Deterministic Build, JoinMarket Fee Fingerprinting, Lexe, 5 BTC Wumbo Channel, Brink's $7.8M Annual Report, Iran's 14 Million Bitcoin Users, Night-Only Bitcoin ETF Absurdity, Lost Bitcoin in Court and more! #Bitcoin Tech Talk #503

Bitcoin Tech Talk #503

Interesting Stuff

Don't spend your life optimizing for the wrong thing.

Don't feel bad for the suckers who bought treasury stocks at crazy mNAVs. They could have just bought Bitcoin and done much better. I used to say this about altcoins in previous cycles. I guess this is progress?

Treasury companies are Bitcoin substitutes, just with centralization, rent-seeking and leverage.

I honestly wouldn't mind some sort of pay-for-discovery thing here where the money ultimately goes to the users. Social media does not have to be free as in beer for everything.

There are so many things wrong with this picture, like the fact that this man is using Cardano foundation funds to take trips to LARP as some Amazonian tribal teen trying to get through a rite-of-passage. But the most offensive is that the man is just 38 years old and looks like this.

Ever since I stopped paying for X my engagements are down 90%. X is holding my audience hostage to extort me if I want to reach them. Such is the inevitable result of closed platforms.

Shill me goods and services that you love that you can't get with fiat money.