.@Galois_Capital says DATs unwind soon @lazyvillager1 says impossible As always, the real truth is probably somewhere in between. - All DATs are built different and operates different. They probably won't all go down at once. - On one hand, so many traders have been salivating over a DAT unwind they see as inevitable. It's one of the most-advertized gray swans in crypto history. On the other hand, many of the current shareholders are starting to get nervous and impatient about this marketwide mNAV compression. - Both the market and the DATs themselves are sort of in control of their own destiny. Investor sentiment and ATM/debt operations dictate both mNAVs compression and mNAV expansion. If either side loses hope, it's over. If your defense for DATs is that they can run the reverse ATM or get acquired if necessary, then you've already lost the game. - We simply don't know what BTC, ETH, etc. are going to do from here. We don't know how much leverage the DATs that actually matter...
I say this as someone who was speaking nearly every day with Kevin at some point on LUNA falling, and works in distressed Zero. That is the chance you get an “unwind.” These vehicles can run to 0.1x mNAV and there is nothing shareholders can do anything about it. At a significant enough discount a competing business can offer to buy the treasury out. In fact the very LPs that contributed to the PIPE may do that. You could get a big sell off in the actual equities themselves. But that contagion doesn’t necessarily spread to the underlying assets bc there is no forced estate sale from a liability management POV. The more realistic scenario is that these vehicles just stop doing anything, and equity is held captive like a GBTC situation If you are hoping for a contagion style blow up in the underlying reserve asset - you will likely be waiting a while. SBET has been below 1.0x NAV for under a month now. You would think they would stop pressing the ATM then right to maintain equity...
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