The Flying Frisby - money, markets and more The UK Investor: Protected from Profits Since 2020
Oh, my goodness me. I don’t think I’ve ever seen volatility like it.
We have a huge speculative bubble on our hands, and it’s popping.
What’s more, this bubble is full of chancers, charlatans and chief executive officers.
The Mail has got onto the story. That is not a good sign.
If I told you ten days ago that the price of a share you just bought would rise from 6p to 40p in a week, you’d be pretty happy.
Then again, if I told you on Monday that something you owned was going to drop by 60% the following day, you’d be pretty unhappy.
That’s what happened with the UK-listed bitcoin treasury companies.
Nobody said it would be easy.
Today we are going to try and make some sense of what is going on. We have a comprehensive list of all the UK companies jumping on this nutty bandwagon. And, most importantly, we consider what to do next.
Let’s start with a timely reminder: owning a speculative bitcoin treasury company is not the same as owning bitcoin. One is a crazy speculation, the other is the future money system of the world. Bitcoin treasury stocks ≠ bitcoin
I hope that is clear.
Now a rant.
The Great British FCA Crypto Farce
I’m looking at the price of Coinsilium (AQUIS:COIN) this morning. It is ranging from 60p to 30p, i.e. doubling and halving. This situation means the beloved UK market makers might be creaming off enough money to keep them in caviar and truffles for the foreseeable future, but the ordinary retail investor is getting hammered.
In the course of 7 trading days, Coinsilium has gone from 6p to 90p to 30p.
The bitcoin price, meanwhile, is pretty much unchanged.
This situation is almost entirely a creation of the FCA, with its decision to “protect” UK investors from the dangers of cryptocurrencies. That protection began in 2020 when bitcoin was $5,000. Today it’s $105,000. That’s a $100,000 per coin increase—a 21x or 2,000% gain—UK investors were protected from.
Remember UK Chancellor Rishi Sunak spinning his “Britcoin” BS?
“It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.
We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.
This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
Nobody told the FCA! How was any of that even remotely possible when the FCA had banned the sale of crypto derivatives to UK consumers, and effectively regulated cryptoasset technology out of existence in the UK?
Did the two departments even speak before he trotted out that rollocks?
Of course they didn’t. They are different departments.
It’s as though the UK government is inherently incompetent.
Remember UK Chancellor George Osborne publicising himself buying bitcoin at an ATM? The FCA made ATMs illegal.
Remind me. Who voted for the FCA? Or indeed Ofcom? Or Ofsted?
Why do these bodies have such extraordinary power?
It’s enough to make you a libertarian.
In any case, we now have this situation of extraordinary pent-up demand, built up over many years, with hundreds of billions of pounds in ISAs and pensions wanting exposure. The result is this insane volatility in UK bitcoin treasury companies.
Smarter Web Company (AQUS:SWC) went from 2.5p to above 600p, giving it a market cap over a billion. It has just £45 million in assets. Great work, FCA.
Today it’s sitting just below 300p.
Japan has similarly prohibitive anti-bitcoin regulations, and has thereby created the market leader in this second wave of bitcoin treasury companies, Metaplanet (3350:TYO). (Strategy (NASDAQ:MSTR) was the leader in phase one.)
The Japanese company announced this week that it has raised another $500 million, with which it is going to pay down its 0% debt and buy more bitcoins. Why is it paying down its debt? Presumably to clean up its balance sheet so it can raise further capital on better terms to buy more bitcoin (it has targeted 1% of total supply, which would be 210,000 bitcoin). The Japanese market is starved of bitcoin access. Metaplanet is exploiting this situation.
Despite a flat bitcoin price, there was a worldwide sell-off of treasury companies starting on Monday. The sell-off coincided, as these things always seem to, with coverage in the mainstream press. In this case, the Mail marked the top with a piece on the Smarter Web Company.
Pretty much all the treasury sh1tcos are now down 50–70%. Is that it? Game over? Or was that just phase one?
I’ve seen this play out many times over the years. I’ve seen it with uranium sh1tcos in 2006, gold junkcos, silver rubbishcos, graphite flybynights, helium hotaircos and more
It doesn’t take a genius to work out where all this is going, and a lot of people are going to make a lot of money. A lot more are going to lose a lot of money.
These things are not necessarily going to zero - they will have bitcoin on their balance sheet. But when bitcoin has one of its biennial corrections, they are going to get crucified.
But we are also going to see a new corporate model emerge as a result.
It’s dotcom, basically. But which companies will be the Amazons and Microsofts? And which are Pets.com and ClickMango?
Every day we are hearing news of another company “pivoting” - who invented that awful word? - into a bitcoin treasury company. It is all happening very quickly.
Here’s a list of the UK companies getting in on the game. Then we will look at what to do next .
Meet the Players.
Should I say, '‘Monkeys”?
In addition to Smarter Web Company (AQUIS:SWC) and Coinsilium (AQUIS:COIN) we have: