KaneCap

$BTC Monitoring the Situation

My goal with the TWIFT Index was to create a super simple index that helps track how public fintech companies are performing. It consists of just 15 stocks and is price-weighted. The TWIFT Index is doing its job: it captured the strong run fintech had in 2024, showed the stress early in 2025, and clearly shows how ugly 2026 is shaping up so far.

We're not the good guys...

Three weeks ago there were rumors that one of the labs had completed its largest ever successful training run, and that the model that emerged from it performed far above both internal expectations and what people assumed the scaling laws would predict. At the time these were only rumors, and no lab was attached to them. But in light of what we now know about Mythos, they look more credible, and the lab was probably Anthropic. Around the same time there were also rumors that one of the frontier labs had made an architectural breakthrough. If you are in enough group chats, you hear claims like this constantly, and most turn out to be nothing. But if Anthropic found that training above a certain scale, or in a certain way at that scale, produces capabilities that sit far above the prior trendline, then that is an architectural breakthrough. I think the leaked blog post was real, but still a draft. Mythos and Capybara were both candidate names for the new tier, though Mythos may now have enough mindshare that they end up keeping it. The specific rumor in early March was that the run produced a model roughly twice as performant as expected. That remains unconfirmed. What is confirmed is that Anthropic told Fortune the new model is a 'step change,' a sudden 2x would certainly fit the definition. We will find out in April how much of this is true. My own view is that the broad shape of this is correct even if some of the numbers are wrong. And if it is substantially accurate, then it also casts OpenAI's recent restructuring in a new light. If very large training runs are about to become essential to staying in the game, then a lot of their recent decisions, like dropping Sora, make even more sense strategically. For the public, this would mean the best models in the world are about to become much more expensive to serve, and therefore much more expensive to use. That will put pressure on rate limits, pricing, and subscription plans that are already subsidized to some unknown degree. Instead of becoming too cheap to meter, frontier intelligence may be about to become too expensive for most of humanity to afford. Second-order effects; compute, memory, and energy are about to become much more important than they already are. In the blog they describe the new model as not just an improvement, but having 'dramatically higher scores' than Opus 4.6 in coding and reasoning, and as being 'far ahead' of any other current models. If this is the new reality, then scale is about to become king in a whole new way. It would also mean, as usual, that Jensen wins again.

Can’t stop, won’t stop

The index has massive correlated risk. I will break down why I think a 50%+ sell off or worse is not only possible, but likely. 60%+ of Americans own equities, with 45% directly holding index ETFS. The SP500 has concentrated 40% of its value into the top 10 companies. That means for every $1,000 that goes into an index etf, $400 goes to 10 companies, while $600 gets split between the other 490 companies. If we look outside of the top 10 companies, about 40% of stock ownership for the bottom 490 companies is from index/passive positions. Lets think this through. Right now there are $45.8 Trillion in U.S retirement assets. Roughly 35% of that is held directly in Index ETFS, and about 50% tracks the index. The majority of directly owned stocks by retail investors are also the top 10 companies. When someone diversifies their passive index investing, they are just putting more money into the same trade. Index funds now represent 52.7% of the total U.S investment market, and U.S about 65% of equities are held by individuals (accounting for mutual funds). There is a massive Cohort in the market that has their retirement savings in the market. With 80% being held by people 55+ years old. What happens when people are forced into selling off their index positions, or scared into selling them off? The strength in equities is in large part built over 15-20 years of undying confidence in the market. Passively contribute, grow, retire. What happens when all of these participants retirements are threatened and they lose confidence, and all start trying to get out at the same time. Decades of passive investment, all trying to get out at once? The door isn't big enough for everyone to fit through. I believe we will find out that when people sell off their individual stocks (which are in large part the top 10 companies), those make up 40% of the value of the index.. so it drags the index.. when people sell of index, it drags the top 10, along with the entire market. Remember, 40% of the ownership in the top 490 companies are just passive index positions. The selling will cascade through the entire market, and this market is constructed so that selling anything is selling everything. I could be wrong but that's what I think.

I shorted $SMH Let the bull market begin!

The S&P 500 is on track for its worst month since 2022.

the california propaganda will continue