SpaceX Is Dogecoin, Bitcoin Is The Cheap One, Says Hedge Fund Manager

Tim Peterson’s Metcalfe’s law model that puts a value of Bitcoin between $105,000 and $108,000 is well above current trading levels, said Mark Yusko.

Mark Yusko of Morgan Creek Capital said that SpaceX is trading at a “silly” valuation and is not sustainable.
Yusko says capital is likely to shift from overvalued AI equities to Bitcoin and gold, possibly spurred by a correction as early as the third or fourth quarter.
He compared SpaceX’s IPO structure to Dogecoin, citing its low share float and roughly $2 trillion valuation as mathematically incapable of justifying a 10x return.

Bitcoin (BTC) remains way undervalued relative to fair value, while SpaceX (SPCX) is trading at a “silly” and unsustainable valuation, Mark Yusko of Morgan Creek Capital said on Friday.

Yusko said in a Cointelegraph interview he expects capital to rotate out of overvalued artificial intelligence (AI) equities and into Bitcoin and gold, possibly triggered by a correction in AI-related stocks as early as the third or fourth quarter. He singled out Anthropic (ANTHZZX), OpenAI (OPEAZZX) and SpaceX, saying that their valuations relative to their power to generate earnings were “beyond silly.”

SpaceX Compared To Dogecoin

He was critical of Elon Musk’s SpaceX IPO approach, likening it to Dogecoin (DOGE) and Musk’s previous approach with Tesla (TSLA). SpaceX made it into the index with about 4% of shares floated, not making any money, and Yusko said the deal was a way for Musk and early investors to get exit liquidity from retail investors. To justify a 10x return, SpaceX would have to achieve about half of projected U.S. GDP in 10 years, given its roughly $2 trillion valuation, a scenario he called mathematically implausible.

“To me, SpaceX is the equivalent of Dogecoin. Mark Cuban and Elon Musk own most of the coins, and then there’s this cult of people that own it and think it’s worth something, but it’s not worth anything.”

— Mark Yusko, managing director of Morgan Creek Capital

Comparing the crypto market to SpaceX, Yusko said he does not expect a crypto-market unwinding on the scale of past equity corrections. Leverage in crypto markets has already been flushed out between last October and February, he argued. “You’re starting at 2 trillion. It’s impossible… you’re saying that SpaceX, which is going to 10x is going to be half of U.S. GDP,” said Yusko.

Bitcoin’s Fair Value

Yusko said he has been buying Bitcoin every week since February and would like to continue until October, using the model of analyst Tim Peterson based on Metcalfe’s law, which he said currently values Bitcoin between $105,000 and $108,000. Much higher than the current trading level for BTC. “So we’ve been buying a little bit every week since February, and we’ll continue to do that… probably through October or so,” said Yusko.

Bitcoin’s price was trading at $64,149, down 0.4% in the last 24 hours. On Stocktwits, retail sentiment around BTC dipped to the ‘neutral’ zone from the ‘Bullish’ zone over the past day. Chatter stayed around ‘normal’ levels.

Yusko says Bitcoin’s four-year cycle is because of its in-built halving schedule, which incentivizes miners to ‘HODL’ (Hold On for Dear Life) rather than sell, leading to price appreciation, which eventually invites speculative excess and subsequent corrections. “In the previous cycles, we went down 84%, 83% and 74%. This time we went down around 50%…51%”, he said. He took this as a sign that the market is maturing.

In crypto, analysts have applied Metcalfe’s Law to Bitcoin by defining active addresses or wallets as “users” on the network. The theory is that the value of Bitcoin should be proportional to the square of the number of users, which provides a theoretical “fair value” against which to compare its actual market price, to see if it is over- or under-valued.

Yusko is Founder, CEO and Chief Investment Officer of Morgan Creek Digital, a hedge fund focused on investments in the blockchain and cryptocurrency ecosystem that manages $3.2 billion of assets under advisement.

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