Sign in Subscribe

The Ether Arms Race Hots Up

Last updated on 
The Ether Arms Race Hots Up
Photo by Kanchanara / Unsplash

DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Read our full disclaimer, here.

Be Sure To Bring A Howitzer To The Gunfight

by Alex King, CEO, Cestrian Capital Research, Inc.

Let’s recap what is happening in the Ether market.

  1. The Ethereum blockchain is likely to be dominant as the system of record for higher-value tokenized assets, like real estate, positions in private market funds, etc.
  2. The only way to pay for transaction processing on the Ethereum network is to obtain and pay with the Ether cryptocurrency.
  3. Several companies are now raising equity and debt in order to acquire Ether quantities at scale, ranging from small $50-100m raises up to multi-hundreds of millions of dollars raises.

Against a backdrop of a bull market phase in crypto, this is accelerating Ether’s price growth particularly quickly. Here’s Ether vs. Solana vs. Bitcoin since the Liberation Day lows, and the S&P500 for comparison.

Might Is Right

Now, in this game we are going to see a handful of leaders emerge, and a long tail of also-rans. Since the game here is accumulate as much ETH as possible, at the lowest blended average price per ETH, at the lowest possible cost of capital, this is going to favor the biggest meanest players on the field.

Read this for background:

How To Win At Leveraged Crypto
In Case Crypto Wasn’t Risky Enough
Cestrian Capital Research.Alex King

Let's recap who the players are right now. More are coming onstream by the day by the way.

The emerging leaders are:

  • Bitmine Immersion Technologies, $BMNR, which has a high-profile Chairman, Tom Lee of Fundstrat, and a high profile shareholder, Peter Thiel.
  • SharpLink Gaming, $SBET, which has Ethereum Foundation DNA on its board.

Then we have a long list of smaller players:

  • Bit Digital, $BTBT
  • GameSquare Holdings, $GAME
  • BTCS, $BTCS
  • And more joining the queue by the day.

Coming to the market soon we have a player purporting to wield a $1.5bn checkbook - this is The Ether Machine, currently a private company which has agreed to merge with a SPAC, Dynamix Corp ($DYNX).

Here’s how each of these names has performed since the April lows, vs. Ether itself and the S&P500.

My guess is that the gulf between SBET and BMNR on the one hand, and the long tail on the other, continues to widen. Ether Machine (DYNX, if the merger completes) is a wildcard - it has grand claims but so far it’s just a narrative as far as a tradable stock goes.

We cover all these in the premium, paid version of this newsletter. You can get that two ways.

  • If you’re a Cestrian Inner Circle member - do nothing. You get the good stuff already.
  • If you’re not an Inner Circle member - you can learn about the service and sign up here:
Big Money Crypto
DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing
Cestrian Capital Research.Alex King

Thanks as always for reading our work!

DISCLOSURE - Cestrian Capital Research, Inc staff personal accounts hold long positions in, inter alia, $ETHE, $BMNR, $SBET, $GAME, $DYNX.