Alex Chase

May 12, 2022. You know who you are...

@mikealfred Because that means nothing has even happened yet?

When I first got involved with 7M shares of CIFR between $1-2 in early 2023, I noted the wild intraday volatility and seemingly blatant manipulative trading. I thought it would trade more normally with higher volumes and prices. I was wrong but that’s a good thing. Know why?

@ianbremmer I think this is a category error. Are you an AI doomer? Love your content, I haven’t seen you post much regarding AI or maybe I’ve missed it. Do you have a geo political position on AI or is this more of a personal tweet like the moose tweets?

it took the cuban missile crisis before the americans and soviets recognized we needed nuclear arms control. what will it take for the americans and chinese to negotiate the arms race in ai?

@BitcoinAIGuy @coinreturns Thank you!!!!

Here's the plain-English version: IREN is raising $2.3B by selling convertible bonds (debt that can convert to stock later). They're using the strong recent run-up to lock in dirt-cheap borrowing to pay for the $3.5B Dell/NVIDIA B300 GPU deal. Good news for shareholders. But the stock is dropping today for two purely mechanical reasons, not because anything is actually wrong: Old hedges unwinding. Back when IREN issued the 2029 and 2030 convertibles, banks set up "capped calls" — basically hedge positions tied to the stock. With the new deal, IREN is paying to tear up some of those old hedges (around the $25 level). The banks have to sell stock to close out their side of the trade. New hedges going on. The funds buying these new convertible bonds aren't betting on IREN going up — they want the cheap coupon plus the conversion optionality. To neutralize the stock exposure baked into the bond, they immediately short IREN. For a $2B deal with 0.50 delta, that's roughly $1B in fresh shorting hitting the tape today. That's why volume is exploding and the price is down despite last week's positive fundamentals. It's forced flow, not sentiment — retail panic or a JPM downgrade wouldn't move size like this. Net-net: management is opportunistically grabbing cheap capital at high prices to fund the AI buildout. The selling is the predictable Day-0 plumbing.

Steady IREN hands: This new offering is good news playing out with the usual Day-0 hedging. With pricing of the new notes, IREN will enter agreements to terminate a portion of old capped calls around $25. The announcement explicitly references the 2029 and 2030 capped call transactions ("Unwind of existing capped call transactions"). This is great for us long investors. By raising $2.3 billion at current valuations, IREN will take advantage of its price run-up to secure ultra-cheap capital (likely a low single-digit coupon) to fund the $3.5 billion Dell/NVIDIA B300 commitment. So today, the share price is being hit from two sources: (1) banks dumping the old long hedges and (2) arbitrage funds shorting to hedge the new $2 billion debt. This is why we drop despite the good fundamental news from last week. Convertible arb funds (the likely primary buyers of the notes) purchase the notes because they like the low coupon & embedded equity option. To stay delta-neutral, they immediately short IREN against the positive equity delta in the convert. E.g., for a $2 billion offering, if the initial delta is 0.50, these funds must short roughly $1 billion to remain delta neutral. And look at that volume. Not explainable by retail freaking out or by JPM re-rating.

@mikealfred Constant bid under it all weekend. Strange action. Something is going on.

@mikealfred See you at 2pm pacific time.

@mikealfred Is it being streamed?

@mikealfred 45 min??????

@LawrenceLepard @Brennan_BTC22 @JoeCarlasare 100% agree @LawrenceLepard did nothing wrong.

@Brennan_BTC22 @JoeCarlasare It had nothing to do with his thesis and everything to do with his cutting me off, condescension and disrespect. I am a man who doesn’t take that shit lightly. You and Joe C are different. I would do the exact same thing again if given the chance.

@Scott_Wiener Haha - heard! but yeah for a straight man SF prob not the best situation.

Oh girl

@JoeCarlasare "F-bombs?" whats with the pearl clutching? Never heard that word used before? @mikemcglone11 has been a dishonest interlocutor for years on MM, he deserves pushback. Both men are big boys and can handle the language.

When you go on a macro economics podcast and start directing F-bombs at other guests, it might be time for your to accept that you've got some issues to work through.

@willywoo I think it’s an oversimplification to attribute price to one cause. I personally don’t agree plus you are making a claim that can’t be falsified. It’s a weak claim with no ability to verify.

12 YR TREND BROKEN. BTC should be a valued a LOT HIGHER relative to gold. Should be. IT'S NOT. The valuation trend broke down once QUANTUM came into awareness. Don't read this post if you want to stay high on hopium instead of seeing things as they are.

@Crypto_TownHall ETH went to proof of stake and is actively trying to lower fees. BTC had a halving. Is @Crypto_TownHall just FUD now without providing context. Be careful not to become what you fear.

ETH AND BTC NETWORK REVENUES FAR BELOW 2021 PEAKS Ethereum and Bitcoin network revenues in 2025 remain well below their 2021 highs, with $ETH falling from $9.9 billion to $665.6 million and $BTC declining from $1.02 billion to $173.4 million, highlighting reduced on chain activity and shifting market dynamics.

@MarioNawfal @scottmelker how can you continue to associate with a person who equivocates like this. Truly a sick person. He can have any perspective he wants but you get to choose who you work for/with.

🇸🇾 Syrian military men beat this Afro-Arab and asked him to bark like a dog because of his social media comments supporting Kurds 🇺🇸 So please tell me again how ICE is “so bad” and why you need to riot and “fight ICE”

@mikealfred Hello $20 my old friend???

Can't wait for some @mikealfred "Hello $X my old friend..." for CIFR & IREN

@RayDalio Gold did well and now we price stuff in terms of gold? How does that help anyone by changing the denominator? The thesis that AI isn't this biggest story because of the debasement of money? What chart has Ray been looking at for 100 years? Yawn.

@mikealfred Code for buy IREN

@ianbremmer Why then? They don’t have the military power and taking an island is harder?

if you think international law and the strength of american objections is what’s stopping xi jinping from taking taiwan…may want to rethink that.

@mikealfred So you’re saying 2 girlfriends now?

@dotkrueger yes but the tops eventually look like bottoms.

Bitcoin treasury companies suffer from a kind of negative convexity: they can lever up and buy when BTC is ripping, but when BTC dumps and they should be buying, their leverage spikes, their market cap shrinks, and demand for their debt disappears. Structurally, they end up buying tops, not bottoms.