Diary of a speculator Prev: cofounder @icoalert @pirata_capital
speculating
Joined February 2018
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These moments might feel like a discount on coins but in reality are like a cancer on speculation for a bit
The stableoin balance in crypto was ~$301B and now its like $295B
That's real people losing funds, that Binance will pay back, but may slow risk appetite for a bit
$INK season is gonna be legendary
Bought some March SPX puts today atm to cover half the equity port and sold a little tech
Am pulling a chunk of cash to crypto
We just need a catalyst for flows and it's game on. Even the Fed slowing could be enough
New unexpected territory for crypto this next go round. 2027
If less people want risk in the stock markets moving into 2027, what's the reason they want risk in crypto between now and then?
This is usually the Fed meeting where you'd think "certainly these guys won't hawk us to death considering the AI trade debacle of October right?"
And then they hawk harder than ever 🫠
As of right now would bid at the following levels between now and EOY:
$Near: $3-4
$VVV: $17.50 - $21.50
$ZRO: $1.25-1.55
$HYPE: $74-79
$ZEC: $1000-1200
$BTC: $75k-78k
Started with a $77.75 fill on HYPE already on Monday
Cautious mostly due to the Fed, so today is a big day
With $ARM up big today, an S1 from Anthropic that was greeted with praise and excitement and bc OpenAI is aiming for their next fundraising round announcement this Friday, I think you can start building a Softbank long here. Remember, 70% of their portfolio is OpenAI and ARM. ARM is up today and the OpenAI round at $1.25T is still a big upround from their previous ~$860m-ish round in March.
I'm attaching to this Softbank long a 1:1 $CRBRS short because they've got insider shares unlocking on Wednesday, with more coming on Nov 9th and then earnings on the 12th. I wouldn't be surprised if price frontruns poor/sketchy earnigns expectations. Finally, only about 6-8% of the tradable total float is short compared to Coreweave at 18% and Blue Owl at 16%. This isn't a perfect hedge 1:1, they're not perfectly correlated, I just like both bets individually.
As CRBRS shorts fill I add to the Softbank long in equal size
Volatility is your friend, fren
Yooo... uhhh... hmmm
This AI debt debacle is really starting to stank the more I look into it. Its not just "circular economy lulz" anymore...
For example, take OpenAI alone. They're a big piece of the AI bubble puzzle bc they buy so much compute. Compute is scarce, so OpenAI and others like them promise payments for compute many years out. All good right? Well fast forward to today and they now have future payment promises that equate to TWENTY FIVE TIMES their current 2026 revenue. Their Oracle bill alone next year ($60B) is 20% larger than their annual revenue this year, thus far.
If revenue can't keep up with future payment promises to companies like Oracle, Coreweave, Microsoft, Nvidia, Broadcom (the list goes on) they have to keep fundraising at higher valuations from the big guys, like Softbank...
Well so, uh, Softbank's stock is crashing because they're actively seeing their debt (the vehicle they use to fundraise) get closer to being downgraded to junk. Its potentially being downgraded bc their debt:portfolio ratio is nearing S&Ps 35% LTV limit.
What's wrong with Softbank's portfolio?
Welp, 70% of Softbank's balance sheet is made up of only TWO companies: $ARM (look at that chart too) and OpenAI equity. Softbank has $40B in bond repayments/refinancing to complete by March alone, with another $15B sprinkled throughout 2027. Basically they borrowed 4.5x more between March 2025 and March 2026 compared to the TWO years prior in order to yeet OpenAI at higher and higher valuations. This type of investment concentration worked when they bought ARM at $32B in 2016 (now worth over $230B) but it's their leverage that is killing them now.
At a debt:portfolio ratio currently estimated to be somewhere in the low 30%s, it would only take another ~15% drop in ARM stock price to breach the S&P limit, opening up the possibility of a debt downgrade from "stable" to "junk". Fitch, another ratings agency, has already downgraded Softbank's debt to junk.
Softbank might have a quarter or two to fix the issue before the S&P officially downgrades it, after which a slew of consequences (read: mandated, forced selling from large institutions) would occur for Softbank and its stock price.
This doesn't mean "its over", as OpenAI is only one piece of the puzzle and only needs to raise $30B this quarter. Even without Softbank other companies like Nvidia/Microsoft/etc. will likely fill the allocation.
It's also not lost on me that many of these companies like ARM and Broadcom sit right at their 200d smma/sma and OpenAI has little to no debt to worry about themselves. Bearish at the bottom?
But when major components of the AI bubble equation start to violently crack it opens up the potential for one-way flows out of stocks: the thing holding up the entire global economy. We got a taste of that over the last few days.
Going to try to map out each player over the next few days, but damn, worse than I thought already wtf