Mad Hedge Bitcoin Letter
October 4, 2022
Fiat Lux
Featured Trade:
(ANOTHER SLIP-UP)
(FSOC), (MAX), (BTC), (ETH)
It’s coming - rules and more than a mountain of them.
They won’t stop until they get their cut.
Blame the industry for attracting the ire of the all-mighty rule makers.
This means that growth in this growth industry won’t be as gangbusters moving forward if ever.
It’s a net negative for crypto because they rely on that extra supercharger growth to attract the incremental investors and all in one poof, gone, like the wind.
What exactly happened?
The Financial Stability Oversight Council (FSOC), a U.S. regulatory panel comprising top financial regulators recommended that Congress pass legislation addressing risks digital assets pose to the financial system, including bills to bolster oversight of crypto spot markets and stablecoins.
Anything that Congress touches usually turns to higher costs and more red tape.
FSOC's report follows a slate of others that were released last month in connection with the White House's executive order. In September, the Biden administration published a series of reports recommending that U.S. government agencies double down on digital asset sector enforcement and identify holes in regulation.
It remains unclear when Congress might pass crypto-related legislation, although several bills have been introduced to address stablecoins and digital commodities regulation.
The FSOC report also suggested Congress pass a bill to provide rulemaking authority to federal financial regulators over the spot market for cryptocurrencies that are not securities, in order to address conflicts of interest and abusive trading practices.
It’s not a joke that regulation is racing to the front and center of the crypto narrative as the biggest risk to the industry.
It’s been quite relentless at this point.
As soon as we think the worst has passed, we are dropped with another trust-toppling scandal that will most likely induce further regulation after the debilitating Congress ruling.
This time it’s mediocre reality TV star and influencer – Kim Kardashian.
She’s the Hollywood socialite that pushed Ethereum Max which is a digital coin that aptly borrowed its name from the second biggest crypto Ethereum.
What have been the results?
Ethereum max is down a stunning 98% prompting investors to sue Kardashian who never disclaimed that her marketing was being paid by the company that owns the token.
Kardashian has filed motions to dismiss the suit, with her lawyers arguing that there's insufficient evidence their endorsements led to the plaintiffs buying EMAX.
She paid a fine of $1.25 million.
EMAX's value is based on the greater fools theory because it has no utility whatsoever.
As investors and promoters like Kardashian talked up this coin, more people invest and the price goes up allowing the investors at the beginning to cash out.
Kardashian was paid $250,000 by Ethereum Max for her marketing efforts.
Altcoins like EMAX lack the stability of older types of cryptocurrencies, like bitcoin and ether.
And EMAX has never reached meteoric highs like bitcoin so the greater fools theory in this coin only reaches so high for the previous investors to cash out.
EMAX is vastly riskier because investing in it can quickly turn into pouring money down a black hole with the asset depreciating rapidly.
While it's unclear how many people invested based off the celebrity endorsements, data found Kardashian's advertisement reached about one in five US adults and roughly 30% of crypto owners.
This is yet another public relations disaster for the crypto industry.
It’s bad enough the industry has impoverished most of its participants, but now it’s really involving the lowest level of brain activity on the human planet.
One might conclude that this Kardashian fiasco might be the bottom because how lower and pitiful can crypto get?
The one silver lining in the reason for crypto not crashing is because the big holders haven’t sold out yet which bodes well for crypto when capital markets start to loosen up.
That appears to be the last leg crypto is standing on which could be either scary or a sanctuary depending how you look at it.
Lastly, steer away from anything other than Bitcoin if you are going to invest.
“I believe this artificial intelligence is going to be our partner. If we misuse it, it will be a risk. If we use it right, it can be our partner.” – Said CEO of Softbank Masayoshi Son
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Biotech and Healthcare Letter
October 4, 2022
Fiat Lux
Featured Trade:
(A POWERHOUSE BIOTECH GOING HIGHER)
(VRTX), (BIIB), (CRSP)
There is no single recipe for building wealth over the years. There are several ways to achieve this goal. However, a particularly effective one is recognizing solid businesses that deliver revenue and profit over time.
You can easily find many excellent candidates in the biotechnology and healthcare world. Actually, a lot of biotech stocks have managed to outperform the struggling market this 2022.
One name that emerged virtually unscathed from the onslaught of economic, political, and financial crises is Vertex Pharmaceuticals (VRTX).
Admittedly, the market downturn has yet to end. That means the company could still experience the effects of macro headwinds and tensions in the near future.
With that said, Vertex is one of the few companies equipped with the right tools to deliver excellent returns in the long run.
One of the reasons Vertex is at the top of the list in the biotech world is its history. The company has been generating solid returns for investors for quite a while now.
In fact, it has impressively surpassed the S&P 500 Index in the past 10 years.
Apart from that, Vertex continues to boost its revenue and profits courtesy of its monopoly in the market for treatments that target the underlying reasons or causes behind cystic fibrosis (CF).
Vertex is the market leader in the CF space worldwide. The company sells four therapies targeting this condition.
The company’s latest approval in this segment was for Trikafta, which received the green light in 2019. By 2021, Trikafta was already able to rake in over $5.6 billion in revenue.
Trikafta can be used as a treatment for up to 90% of CF patients. This number goes beyond any of those delivered by other Vertex products. More importantly, Trikafta will keep its patent exclusivity until the late 2030s.
That provides Vertex with plenty of time to make headway and expand the application of the product to cover previously untapped markets—a strategy that the company has been perfecting over the years.
Vertex has been busy winning approvals in new age groups and more reimbursements in several countries to ensure longer-lasting dominance in this segment.
Recently, the biotech has launched its Phase 3 trials for a candidate that may be an even better product than Trikafta.
While details have been kept under wraps, Vertex shared that the product would be a one-time curative treatment. Needless to say, this would translate to a massive payday for Vertex.
If everything goes according to plan, this new candidate might be launched by the first quarter of 2023.
At the same time, the biotech has been working on promising candidates for much-needed treatment areas, projected to generate billions of dollars in revenue.
This move is aligned with the strategy Vertex has been using over the years: target diseases with only a handful (if any) of safe and effective therapy options.
Among Vertex’s promising but ambitious programs is VX-880, a potential treatment for Type 1 diabetes.
While this could be a long shot, Vertex’s decision to buy ViaCyte for $320 million speaks volumes of the biotech’s seriousness about the endeavor. For context, ViaCyte is a private company focused on developing a functional cure for Type 1 diabetes.
This acquisition enables Vertex to add researchers who have been working on the same goal for years to contribute their expertise to the pipeline. Plus, ViaCyte can bolster Vertex’s manufacturing expertise for cell-based therapies targeting Type 1 diabetes.
Of course, there’s the work with CRISPR Therapeutics (CRSP) to develop gene therapies. Combining this collaboration with ViaCyte’s pipeline, which includes gene-edited cells created to evade the immune system, means Vertex could design a program eliminating the necessity for immunosuppressive therapy.
Meanwhile, there are other solid candidates in the biotech pipeline.
So far, Vertex has been having discussions with the FDA. The company has recently provided proof of concept data for its candidate for Exa-cel in sickle cell disease and transfusion-dependent thalassemia. Given the progress, the product should be slated for release by early 2023.
Another is VX-147, which is a kidney disease candidate that’s currently in crucial development. To date, the product is on track for accelerated approval and could start generating sales by late 2024.
On top of these, Vertex has been working on alternatives for opioids to avoid overdoses. Amid the growing concerns and data on the addictiveness of opioids, these continue to be prescribed as treatments.
This epidemic shows no signs of slowing down, with the CDC’s recent estimate increasing to 75,000 Americans dying from an overdose. According to the CDC, over 2 million Americans are addicted to opioids.
One explanation for this issue is that there is no effective alternative. While Vertex’s initial candidates failed to show an optimal profile, its latest candidate may very well be the answer.
The new candidate, VX-548, was created based on observations and research on families in Pakistan with the rare ability not to feel or experience any pain.
Due to this particular genetic abnormality, members of these families are able to walk on hot coals, get stabbed with knives, and jump from heights, and experience absolutely no pain at all.
The genetic mutation stops the peripheral nervous system from sending pain signals to the brain.
Vertex and other developers like Biogen (BIIB) are attempting to develop drugs that mimic the pain-blocking ability resulting from this genetic mutation.
If successful, VX-548’s greatest asset is its non-addictive potential, thereby making premium pricing more likely justified.
The current market for acute pain treatments annually is $4 billion, and that number is for generic pricing.
Considering that the pricing of a branded treatment would probably be at least double, then the commercial potential is massive.
Over the next 10 years, Vertex is expected to launch new biotech treatments which, combined with its current CF franchise, will propel its earnings, profit, and share price to even higher heights.
It’s currently facing the bear market without so much as breaking a sweat, with stock prices climbing by roughly 28% so far this 2022 compared to the market’s 19% decline. I suggest you don’t wait too long to buy into Vertex, as this is a top-tier biotech.
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more