🧚🏻♂️ Terra Luna Saga Continues
Short-seller on his way to make millions from his prediction on Terra Luna's fall
gm frens 🤓
Not much happening on space. BTC and ETH keep staying pretty much at the same levels. Terra Luna Saga continues. Turns out Solana NFTs are not that bad. Let’s dig deeper in those topics.
🧚🏻♂️ Terra Luna Saga Continues
If you want to learn exactly what happened in the last couple weeks, you can refer to our previous newsletter on the same topic.
In almost any economic crash, there are people who are in the right side and in the right moment. I mean that’s what happened with housing market crash. Michael Burry did predict the housing market crash so he did short sell the market (right side, right time), and he was able to take $100 million profit for himself and a profit for his remaining investors of more than $700 million.
Why do I say right side? You can do a short sell and lose shit ton of money. That’s what happened with hedge funds who lost around $20 billion on GameStop Saga (bad side, bad time).
So what is short selling? In plain English, it is you expecting that a stock’s price will decline in the future. It is a speculation of what might happen. While short selling can be used for different purposes, it is most widely used for speculation purposes or as a hedge against risk exposure you have in a long position. In most of the cases, short selling is used among experienced investors, although we have seen more and more retail investors who are short selling lately (ease of access through Robinhood or other similar apps used for trading with options).
When you short sell, you lock in a price (exercise price) for which you are supposed to pay a premium. If the stock’s price falls down to the level you have predicted (strike price), short selling is triggered. What that means is that you will be able to buy the stock at the strike price which is you buying low and sell it for the price you locked initially (exercise price) which is selling high.
Profit = Exercise price - Strike price - premium paid for the contracts traded
What this has to do with Terra Luna?
Well, the reason why I am bringing this up is to simply educate the audience in the short-selling strategies and the unlimited potential of losing all your money when involving in short-selling type of trading. Keep in mind, down-side risk is unlimited. Besides that, it seems like while most of the retail investors were loosing money, there were people who did predict the fall of Terra Luna so they did short-sell and they are on their way to make money (FYI, short-selling works for crypto as well, the same way it works for stocks).
Kevin Zhou, the co-founder of Galois Capital was aware of the issues happening with $UST peg and he predicted that it will collapse soon. While he mentioned that he was expecting the fall to happen over months, it did happen much quicker than he expected. He did short-sell himself Terra Luna. While he did not share any specific information on the short-sell, it would be fair to assume that when he did the short-sell (assuming he was aware really early), Terra Luna price was well above $80. He also mentioned that the short-selling it is still-going, meaning that if it goes lower he is about to make even more bank. Depending on how much money he did the short-sell with, this could make him hundreds of millions of dollars, if not billions.
Here’s his interview with Coindesk where he talks more on why he know that Tera Luna will fall.
💃🏻 Turns out Solana NFTs are not that bad after all
If you have been in the space long enough, you know that all successful NFT projects were on Ethereum Blockchain. Every time there was a successful NFT project on Ethereum Blockchain, a copy cat of that project would be created in Solana Blockchain. There are no barriers to entry (meaning Solana has really cheap transaction costs, a penny or less at times). This brought so many scammers in the MagicEden platform, which was the biggest Solana Based marketplace before.
However, this changed as soon as OpenSea started supporting Solana-based NFTs. We wrote about this in one of our previous newsletters. See below.
All of a sudden, while everyone saying on how Solana NFTs are lame, Okay Bears project is on the headline everywhere.
Currently, it is sitting at 254 SOL floor price (~$14k) and a total traded volume of 1.4 million SOL on secondary markets (~$77 million).
It is being considered the BAYC of Solana based NFTs. Whether this project will be successful or not, I have no idea. But it serves as a learning lesson (for me personally) to be more open on trying projects which are not on Ethereum Blockchain.
Guess what? Karma is a b* (boomerang, you dirty mind..)
While all successful projects on ETH were copied to Solana Blackchain before, now is the time to reverse the process. Payback time. Seeing the success Okay Bears had, someone created a copy cat of the project by calling Not Okay Bears. All they did (literally), was that they just reversed so that the bears are facing left instead of right. 😂
While the first 1k were free mint, the rest was minted at 0.02ETH price. As of last night, although the project seemed to be more like a parody, it did trade well over one million dollars on secondary sales on OpenSea.
Turns out OpenSea did not like it, which might be the reason why the project was delisted. OpenSea link does not work anymore, it sends to 404 page.
⛑ Tweet Of The Day
The founder of Binance said that they invested $3 million in Luna back in 2018. In return they received 15 million LUNA. At the peak price, that was worth $1.6 billion. Guess what? Currently it is valued somewhere around $2,000.
My take on this (not a financial advice) - You are supposed to invest in anything, only if you really believe in them, their product/service or if you see a long term value coming out of it. My personal experience has not been great so far in investing. And there is a reason for that!
I have held crypto/NFTs longer than I was supposed to. I have sold crypto/NFTs earlier than I was supposed to.
I am saying this to remind you that, sometimes selling them whenever you are happy with the profits, is not a bad idea. Being greedy, won’t help you all the time. If you were in Binance’s position where you 560x return on your investment, it is really stupid to hold all of them IMO.
