My favorite investment (not trade) for 2022 is Ether Capital (TSX: ETHC.NE) which has gotten a bad rap as the $MSTR of $ETH.X. It's much more.

Ether Capital holds 43.5K ETH in a public investment vehicle, and stakes 10% of its holding. It also holds $MKR.X and a small position in Wyre. Vs Microstrategy which has a legacy shrinking business, Ether Capital is a pure play holder and staker of Ethereum.

Best of all is the sum of the parts analysis:

43.5K ETH * $3,858 = $168M

2.3K MKR * $2,532 = $5.8M

(+) Wyre investment at cost of $1.9M

(=) $176M total holdings. Current Market cap is $163M and there will be a 5.2% staking yield akin to a dividend.

Most impressively, company has been public since 2018 and has persevered through crypto winter.

Investor presentation below:

After a two month hiatus, it feels great to be back on Commonstock. Growth stocks declined by 30%+ in the past two months, I sat out and bought more $COIN $AMPL $DOCU $ASAN $BTC.X

I've seen this happen before in Q1 16 and Q4 18. Growth stock multiples contract, people freak out, and the paper hands are on display.

I still don't know if I made the right moves, but humbly I went back to fundamentals and re-underwrote what I own. Key learnings:

I made a huge mistake 3 months ago.

Three months ago, I listened to $PTON’s 4Q21 FY earnings call. My framework for high conviction stocks (I hold <15 single names) is massive market opportunity, high NPS product, and management that can execute an ambitious vision.

I heard a bloated corporate infrastructure focusing on launching an apparel brand (run by the CEO’s wife) vs adding more classes, fitness types (see Tonal or Hydrow), or lowering subscription prices. My fault.

I blame myself

Who here has tried to buy an NFT through $ETH.X and found the gas fees to be ludicrously high?

The underlying commodity that powers cryptocurrency is called blockspace. In the blockspace market, miners are the producers, mining pools are the auctioneers, and users are the bidders.

Users want to minimize the fees paid to miners to enjoy a smooth experience, whereas miners want to maximize their revenue since they are for-profit entities. Demand has outstripped supply = ETH price spike.

This is nuts.

Comparing 20 years of third party marketplaces (defined as when a business or user can sell to another business or user through an internet based platform), shows the power of operating leverage (increase in EBITDA margins through the efficiency of tech) through reduced Sales and Marketing costs.

Web 2.0 properties like $GOOG and $FB preclude crypto companies from advertising on their platforms. Now it makes sense: crypto $TWTR and Commonstock chatter is the key input for growth.

The “flippening” is happening.

The flippening was coined by the $ETH.X community for when the market cap of ETH would exceed that of $BTC.X.

It is a philosophical bet on the utilization of cryptocurrency use cases like trading, lending and earning versus the digital gold thesis of Bitcoin (store of value).

Check out $SOL.X too.

Last week’s $HOOD numbers were disappointing. But I think I might be missing the bigger picture.

With 20M engaged customers, the real edge was never offering $DOGE.X on its platform, but the vast improvement in user experience to access the financial markets.

Investor Relations is an entire job function that has had no real innovation in decades.

$COIN solicits user feedback directly from shareholders through Robinhood, which will likely buy ads and other high margin financial products.

Time for a debate.

eCommerce pulled forward 10 years of growth during COVID-19, and now offline commerce is going through a similar transition. Two companies to track in this space are $TOST and $LSPD.

At first look, they are commodity PoS (point-of-sale) digital cash register businesses, with two very different strategies.

$TOST wants to be an all-in-one commerce OS so restaurants can manage ordering, delivery, and even payroll.

$LSPD is growing through acquisitions across B2B commerce.

Alpha is real.

Whalewisdom tracks 13F's which are hedge fund quarterly filings that disclose long positions, but exclude leverage, options or shorts.

Notice the one year, five year, and ten year performance in this chart. If you just bought S&P 500 or NASDAQ index funds, you would have made 4x your money over 15 years.

But the top 20 hedge funds made 21x their money over the same period.