Founder of bitmex: as a "bond", Ethereum will exceed US $10000 by the end of the year

Wu Shuo blockchain 2022-04-03 19:37:59 阅读数:323

founder bitmex bond ethereum exceed

author :BitMEX founder Arthur Hayes

The original title :Five Ducking Digits

compile :Gary Ma

I don't really like the so-called... In the traditional financial field “ Financial advisers ”, Their purpose may not be to sincerely provide financial advice to you , Instead, maximize their own management fees and performance fees , Even if the final financial performance is not good , They can also get that part of the income .

And most of the people I met “ Financial advisers ”, The attitude towards cryptocurrency is generally disgusting , And tell its customers not to invest in cryptocurrencies .

Of course , We don't need to “ Look down upon ” they , We should apply their usual financial knowledge to the cryptocurrency industry . And this article is just to show that when given to individuals 、 When companies and governments provide investment recommendations , The importance of classifying the subject matter of assets .


ETH What is it? ?


This is a simple and profound question .

If you say it's a commodity , Then a class of investors will be interested .

If you say it's a currency , Then another kind of investors will be interested .

however , If you can convince the world ,ETH It's just an indefinite bond ?

The merged Ethereum will transition to PoS, The verifier's pledge reward and network service fee make ETH Into a bond .

If we can convince financial advisers ,ETH The asset classification is a bond, not a currency , Then maybe they can be moved by it . In addition, by that time, Ethereum has become more environmentally friendly and prosperous ecological data , bring ETH Compared to bitcoin 、 Legal currency and other L1 competitors , Obviously in a state of extreme underestimation .


Calculate ETH My pledge account

According to Ethereum researchers Justin Drake Forecast data for , Early stage after merger , The annualized income of the pledge is about 8–11.5%.


If you are one ETH Die-hard fan , You may agree or disagree with these figures . But I will now regard them as “ The facts ”. The focus of this article is not to study the yield in depth, but 5% still 10%, Instead, use scenario analysis to analyze ETH Valuation as a bond .

In this analysis , We will assume that you are selling the same amount of dollars to buy 32 ETH. This is extremely important , I look at this valuation from the perspective of a person who invests in legal currency first . therefore , Like any arbitrage transaction , The cost of dollar capital is extremely important .

To maximize the impact of this analysis , We must convince the larger allocators of capital , Convince them ETH It's a bond . Once this idea is established successfully , The follow-up will be natural .

These pools can borrow funds closer to the U.S. Treasury curve . That's why I'll use 5 The year 、10 The year 、20 Years and 30 The yield over a period of years is my discount rate . I used the above table for ETH Estimation of rewards , This is it. 8%、9.60% and 11.50% The source of income . I used these bonds in 2022 year 3 month 28 The rate of return at some point in the day .

step :

  1. Borrow dollars for a while , Then buy... At the current exchange rate ETH.
  2. pledge 32 ETH, earn ETH Currency based rewards .
  3. After a certain number of years , Sell out 32 ETH And get a dollar reward .
  4. Repay the dollar loan .

The following table is based on ETH Unit ETH Present value of bonds .


remember , We use 32 ETH Start . This is because ETH The value of currency based bonds , This includes the initial 32 ETH The principal . Market practice is to quote bonds as a percentage of their face value , This will be 32 ETH. But in order to highlight the number , I used the nominal ETH amount of money . I didn't put ETH The proceeds of are also reinvested through pledge . If we receive ETH The income is compounded continuously , Then the value of the bond will be higher . obviously , Continuous compound interest is possible , Also financially cautious , But for the sake of mathematical simplicity , I didn't do that .

The following table reflects ETH/USD Breakeven price . This is the price at which the loan matures , From a dollar perspective , The transaction is break even . I assume that all ETH Cash flows are constant ETH/USD The price is converted into US dollars , So I can calculate the price at which the transaction becomes uneconomical .


Here is another version of the same table , This is based on the current ETH/USD Spot price 3320 Expressed as a percentage change in the dollar .


Local currency bonds


Local currency bonds refer to bonds in which the issuer's domestic currency is the same as the borrowing currency . If you are a dollar based investor , These bonds have currency risk . Some investors like these bonds , Because they usually have high returns . However , If investors hedge their currency risk , The effective rate of return usually decreases .

Usually , Non deliverable forwards in emerging markets (NDF) The point is positive . This is because of the relationship between interest rate parity . however , Look at this Malaysian ringgit NDF An example of .


The spot USD/MYR yes 4.2148, and 1 The year NDF yes 4.24/4.26, It means that its trading price is higher than the spot price . If I buy MYR Local currency bonds , And need to sell in the future MYR And buy USD, I'll be on the right (RHS) transaction , And effectively pay forward points . That means I need to spend money to hedge my position .

Some investors are willing to take currency risk , Some are not . As an excellent financial consultant , You are contradictory , You will just offer two different products . One is hedging , One is not hedged . And in both cases , You have to charge a fee .

stay 5 The year ETH In the case of local currency bonds , If we assume that the annual rate of return is 11.50%, that ETH/USD The price of must fall 29.35%, Investors will be in 5 Loss in US dollars after years .

But if investors want to hedge currency risk , At a minimum, they need to hedge their expected total cash flow through forward transactions . Now? ,ETH/USD Listed futures in the past 3 Very little liquidity in months . I am here 2022 year 3 month 28 I contacted a famous broker on the th , Ask them 1 year ETH/USD What is the median price of the forward premium or discount .

If I were in ETH Long on bonds , And get the ETH/USD Forward quotation , I'm on the left (LHS) transaction , sell ETH Buy dollars . The broker offered me a premium in the middle of the market +6.90%. That means to hedge my local currency ETH bond , Actually, I got my income . I sell... At a price higher than the spot price ETH/USD forward . This is a positive carry trade .

Few transactions allow you to get a higher yield when investing in foreign currency bonds , Hedging back into your local currency actually makes you money .

As the last part of this analysis , I use from pledge ETH The verifier's income obtained valuates a permanent bond .


In the first place , In my submission ETH Similar to permanent bonds . It's a bond with no maturity date . stay 2016 Before delisting at the end of the year , Konzern is one of the longest consecutive price history of all government bonds ever issued .


In the hundreds of years of history of this debt instrument , The nominal long-term yield in the UK is basically 5% Or lower . therefore , Let's assume that the long-term yield from now on is 5%, and ETH The rate of return is the low end of our forecast 8%. We come to the conclusion that ETH The final present value of cash flow is 51.20 ETH. This ETH The input required for cash flow is 32 ETH.

If we use it to determine ETH The implied value of a bond , We get the following chart . These values are just [ The spot * ETH The present value of the reward ] Multiplication of .


This should not be regarded as a price forecast , But as a guide to a new way of thinking . If you think ETH Can or should be valued as bonds , So as an investor , Considering your long-term interest rate and ETH The return assumption , You should be willing to buy... At today's price ETH, As long as it trades at a discount to the price of its permanent bond derivatives .

When we discuss later ETH Bond derivatives , We will return to this eternal ETH Bond form .


Give full play to capital efficiency


Use ETH bond , Need to lock in capital indefinitely . This is because at present , Once pledged on the beacon chain ETH, You can't release the pledge . After the merger , When POS At the beginning of the verification ,ETH Yields will rise , But the pledgor is still frozen .

There are various authentication pools , Allow traders to contribute easily ETH And start earning money . In order to provide mobility to those who are locked , These pools have issued their own tokens , These tokens are in 1:1 The way to anchor the cast ETH.

for example , If you put 1 ETH Deposit in Lido Capital pool , You will get 1 stETH, Its trading price is determined by the market . The three largest pools of funds are Lido、Binance and Rocketpool.


This figure shows a pool of tokens and ETH Daily premium or discount percentage of the transaction .

Pool token price premium =Rug risk + Implication ETH Return + Liquidity preference

Let's give an example :

Rug risk : This is the risk of some vulnerabilities in the verifier code . If , Whatever the reason , This smart contract has been broken , The pledgor's funds may not be available .

The implicit ETH Reward : These tokens will be received in the pool ETH Reward . therefore , The market will convert the reward received by the token holder in the future to the present .

Liquidity preference : This is the hope of those who put money in today . The higher the preference , Token pairs in a pool ETH The higher the discount . On the other hand , If a pool limits what it can accept ETH Deposit volume , Liquidity preference may actually increase the price of pool tokens , It's like Rocketpool It's the same thing .

My analyst delved into Lido、Binance and Rocketpool The details of each token , Try to understand why they are right ETH The transaction premium is different .

Lido: This pool has the largest market share ( about 85%), The transaction is very consistent with ETH The price of . When you pledge ETH when , You will be 1:1 The proportion of stETH.ETH The pledge rewards will accumulate to stETH subtract Lido The fees charged for providing services . This pass can be used in other DeFi Used as collateral in applications , It doesn't affect ETH The accumulation of rewards .

Binance: This is the second largest market share pool , The transaction price is lower than ETH. When you pledge ETH when , You will use 1:1 The proportion of bETH.ETH The pledge reward will be paid by bETH get , Less the cost of services provided by Qian'an . This pass can be used in other DeFi Used as collateral in applications , But when bETH When you're betting outside your coin purse , You won't get ETH Reward . My analysts believe that , That's why bETH The transaction price ratio of ETH An important reason why it is much lower . stay DeFi In ecosystem , It's not like stETH or rETH Such a good auxiliary tool .

Rocketpool: The market share of this pool is the smallest of the three pools . Its trading price is always higher than ETH. When you pledge ETH when , You will be 1:1 The proportion of rETH .ETH The pledge rewards will accumulate to rETH subtract Rocketpool The cost of providing services .Rocketpool It's decentralized , Unlike the other two pools , And severely limits its acceptable ETH The number of deposits . Only after more operators go online , Before you can accept more deposit . This pass can be used in other DeFi Used as collateral in applications , It doesn't affect ETH The accumulation of rewards .

stETH yes ETH The best approximation of the present value of bonds . I put forward a theoretical hypothesis about present value , and stETH Is the specific market performance .

stETH The transaction price is basically the same as ETH Agreement , This is puzzling .

Liquidity preference :Coingecko data display ,stETH Market value 98 Billion dollars , Daily turnover 1 Billion dollars , About% of its market value 1%. The ratio of Ethereum's daily trading volume to market value is about 3%. If stETH The holders of really care about what they can't get lido The investment ETH Liquidity of the balance ,stETH The trading volume will be higher relative to its market value . therefore , Investors' liquidity preference seems to be close to zero . As more and more DeFi The platform accepts stETH As collateral , take stETH Realized as ETH There is less demand for .

The implicit ETH Reward : If we think the merged ETH The annual reward is 8%, So the implicit reward is 8% Multiplied by the number of ETH The time of release . We don't know how long this is . If the market believes that after the merger 6 It will take months to release the ETH balance , Then the premium should be 4%.

Rug risk : It is almost impossible to estimate what the risk is . We can only prove it by assuming three other variables . However , One thing is for sure , If you put ETH It's in Lido On , And don't believe in the integrity of Technology , You'll take your stETH Sell out . But considering that stETH And ETH The transaction value is the same , And the average daily trading volume is low , The market must believe Lido Technology .

My conclusion is this ,stETH Or suppose the whole ETH 2.0 The process will be completed very quickly after the merger , Or merge with ETH Bonus bonds are mathematically compared to , It is extremely underestimated . If , After reading this article , Market participants agree with me , namely ETH The merger is a bond , that stETH It should be traded slowly at a higher and higher premium .

Collateral utilization

Since these pledged tokens exist , They should be used as DeFi Collateral in the ecosystem , Essentially unlock the trapped collateral .AAVE It's a decentralized loan agreement , Allow traders to stETH As collateral . at present , As collateral stETH Of LTV by 70%.MakerDAO It also allows users to use encapsulated stETH(WSTETH) As collateral to create DAI, That is, its stable currency linked to the US dollar . The current guarantee ratio is 160%.

It's huge . The cornerstone of the global legal credit market is the ability to create debt assets , This is just a loan to some entities , Then use this debt asset as collateral , Borrow more money . This is the way the lever flywheel drives the global economy .

Although this behavior has obvious benefits , But it does bring systemic credit risk to the system . If the agreement allows more and more use of pool tokens as underlying collateral , And there is a matchmaking event that makes pledged tokens worthless , Then all the values built on this basis will also be affected . As these tokens become more widely accepted , We must pay attention to this risk .DeFi Are the benefits of , All activities are completely transparent , Because it's on the chain . therefore , We can build a very accurate monitoring system to measure the real-time performance attributable to pledged tokens DeFi Systematic credit risk .

In terms of interest rate and credit derivatives , The use of these pledged tokens is almost unlimited . however , Before I get too excited , Let's first look at how the market develops . future , I will have many promising projects , These projects are beginning to use this new pool of collateral to do innovative things , And give... In a decentralized way ETH The fixed income market brings life .


Michael Saylor What will be done ?


Saylor It's a “ rogue ”, Because he used Microstrategy Convenience , Take the institutional corporate bond market as a financing tool to obtain bitcoin . This is indeed a strategy , But bitcoin is a pure currency , There are essentially no benefits .ETH It is a commodity that powers the world's largest decentralized computer . After the merger ETH There will be inherent benefits .

Saylor Or any other high-yield issuer should do is issue debt and buy ETH. This is an active arbitrage transaction .


The chart above shows Bloomberg's average high yield of American enterprises OAS. This shows that , US corporate junk bond issuers currently pay an average of 3.41%.

Use the model above , Let's assume that you are the CEO of an entity , Want to pass meme To get a high share price . Never mind what your business should do , Your goal is to achieve financial optimization .

Input :

3.41% The cost of capital

5 Years due

8% ETH Reward

3,320 The dollar ETH Price

Output :

The present value of this bond is 41.28 ETH.

Break even ETH price is 2573 dollar , That is, falling 22.48%.

hypothesis ETH/USD There is no price change in the exchange rate , The rate of return in US dollars is 29%.

A profligate CEO Will it really hedge currency risk ? Absolutely not !

For any listing CEO Come on , Announced borrowing plus large purchases ETH bond , Can create twice the value . First , Because your stock is now a stock with "DeFi"、"web3.0"、"metaverse" Companies waiting for labels , This will make reddit meme Stock traders are excited to raise . secondly , The deal has a positive spread ; therefore , Put this in 10 Billion dollar scale , According to accounting treatment ,2.9 $billion in revenue can be recognized immediately or in the future . You won't lose money !


ESG: The investment theme of green environmental protection


ESG The investment theme is now very popular in the traditional financial field , Although this idea is correct , But who knows if this is a gimmick for financial advisers to better promote their products to you . Although many funds have previously wanted to allocate some funds to cryptocurrencies , however PoW Energy consumption violates ESG idea , But Ethereum merged and transitioned to PoS It's a kind of right ESG Cater to , They will ETH Change , This makes ETH It will be aimed at a wider financial audience , Although many other public chains also use PoS, But as a trader , This marginal change in fundamentals , It's a huge positive .


Ethereum killer


Ethereum's performance problems are always criticized by competitors , The prices of these Ethereum killers began to soar last year , The valuation has been greatly improved , Now Ethereum is on the cusp of merger , This may or may not lead to performance improvements , So relative to other L1 Tokens, ,ETH Will you perform better ?


This “ Price / developer ” The ratio chart reflects some L1 Market value divided by the number of active developers .

Electric Capital Published a very important and insightful research article , It estimates the number of active developers on each mainstream public chain . A public chain is built to be used . If only a few developers create new projects on a chain , Then this chain will never become valuable .

Most Ethereum killers have a much higher multiple , Because they want to attract talents to develop on their chain .

According to this report , Ethereum has about 4000 Developers , It's bigger than Boca on the chain with the second largest developer group 3 times .


This “ Price / Address ” The ratio chart reflects the selected mainstream L1 The market value of the agreement divided by the number of addresses .

The number of addresses on a chain is another rough but useful indicator , It can be used to evaluate the health of public blockchains . Ethereum's address number is second Solana Of 16 times , But at price / Address calculation , Still cheaper .

This is another good indicator of speculation . That's just to get from ETH Blockchain that exists to grab market share in the hands of , The multiple is much higher .


“ Price /TVL” It's the market value divided by the agreement dApps The total value of lock in .

This ratio is to identify DeFi The easiest way to get attractive .ETH It's the third cheapest , Second only to TERRA and AVAX. I'm not even sure ADA Should it be included , If there is a currency that is purely traded by hope , That's it Cardano.

If you look at these basic ratios ,ETH Maybe the cheapest L1. Ethereum's success has bred a number of competitors , They trade with a promising future rather than specific performance . It's not wrong , But when ETH About to feel bonds and ESG Favorite time of investors , Can these other coins keep pace ?

If you are a capital allocator , Or you already have some of these coins , Or you have to choose which to invest L1 Tokens, , Don't you want to buy the cheapest one ? although ETH Its market value is several orders of magnitude larger than its competitive chain , But judging from the valuation of Network Fundamentals , It's still cheap .

With the progress of this year and the arrival of merger , I expect ETH The performance will be much better than any build L1 chain . This statement comes from 2020 Year to 2021 Valid until the end of the year , But now , From the perspective of capital flows and returns , Ethereum supports extremely positive price fundamentals .

Please don't mistake these emotions for me L1 The chain cannot be retested 2021 year 11 Month's record high . This is purely a relative argument .ETH Can rise to 10,000 dollar , It's about 3 Times the return , and Solana Can rise to 200 dollar , It's about 2 Times the return . You will have Solana And feel happy ? Capital will flow where it is best treated .


To configure ETH In three ways


There are three ways to consider how to configure ETH: Legal currency & The currency & other L1.

Legal currency


This is a ETH And NASDAQ 100 Exponential 10 Day rolling correlation chart , The correlation coefficient is as high as 84%.

ETH( And bitcoin ) It's a risky asset , Just like the big technology stocks in the United States .

As the Fed continues its path of raising nominal interest rates , as well as 2s/10s Upside down of curve , Point to a future US recession , The stock will be crushed ( Index decline 30% To 50%), Until there were problems in the credit markets , The Fed reopened the money printing machine .

If I believe this with all my heart , Then I must also believe in the dollar ETH Can fall 30% to 50%. Unless the broad risk asset market collapses , perhaps ETH And Nasdaq 100 Index or standard & Poor's 500 The short-term correlation of the index began to decline , Otherwise, I won't sell legal currency and buy it ETH.

Whether I'm right ETH What do you think of strong fundamentals , Macroscopically, it does not exist .


I am here 2022 The cryptocurrency portfolio at the beginning of the year is 50% Bitcoin and 50% The Ethereum of . I firmly believe , Compared to other areas of the encrypted world ,ETH It's cheap . therefore , My goal configuration is 25% Bitcoin and 75% The Ethereum of .

Bitcoin has once again become “ The worst rock star ” Need to change the narrative . Similar to Ethereum , Bitcoin is seen as another risky asset , But it's a huge risky asset , Because it trades around the clock , It is the only free market in the world .

Bitcoin must again be seen as a store of value and a hedge against inflation , Because it is the most difficult form of money ever created . Ethereum is not money , It is a commodity that powers the world's largest decentralized computer . The Ethereum community clearly decided ,ETH It's a commodity used to drive this computer , Not a pure monetary instrument .

At the protocol level , Bitcoin has no implied yield , But the merged Ethereum has . therefore , Bitcoin is money ,ETH It's a commodity linked bond .

As the global real interest rate is negative , I want to have an asset with a positive return in its currency . at present , This is it. ETH, Bitcoin itself does not generate revenue . therefore , From a pure spread point of view , I should have more ETH Not bitcoin . Thanks to the new reward and verification system , When ETH The price of has risen sufficiently to include future ETH Cash flow , This will change .

Last ,ESG The funds for this kind of environmental protection investment theory will also be merged “ Security ” Invest in ETH, Not bitcoin .

ETH vs L1s

I hope the chart released earlier can clearly show , Think ETH Underestimation is based on Network Fundamentals , Its competitors are more based on a brighter future . Again , other L1s May achieve their overthrow ETH The dream of , But it's hard for them to do . With ETH The coming implicit rate of return , as well as ESG Investor allocation ETH The ability of , transcend ETH The hope of will be more and more slim . They'd better trade something they can prove to be undervalued on the fundamentals of the Internet .

Finally, let's talk about asset cross chain bridge .Wormhole and Ronin(Axie Infinity) The stolen value is nearly 10 $ ETH、 Other cryptocurrencies and stable currencies . In essence , These bridges are ecosystems trying to put all in ETH Built natively on the amazing DApps Import to the new chain . If traders are tired of worrying about whether their bridge will become the next implosion bridge , They may just put their TVL And business migration back to ETH, This is marginal to any competitive L1 It's negative . Believe in V god , Instead of putting your feet in the Styx , Flirting with Pluto's anger .


ETH The price broke through five figures


A few years ago , I wrote an article , forecast ETH The price will break through double digits , This was soon achieved .

then , When I see a chart showing a building based on Ethereum DApp When the total value of is greater than the market value of Ethereum itself , I further configured ETH, This is a strong buying signal .

I have experienced the current ups and downs , And in my crypto Portfolio ETH The relative size of the configuration is very satisfactory .2022 The rest of the year will be ETH Show time .

When the dust settles at the end of the year , I Believe ETH The transaction price will exceed 1 Thousands of dollars .

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