After the Divorce, I Found a Thousand Bitcoins - Chapter 36

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This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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I Got Divorced and Found a Thousand Bitcoins Episode 036

 

Exchange rate 1,450 won.

 

This amount wasn’t at crisis level yet.

 

The problem was the speed of the rise.

 

“To think it rose 30 won in less than a week.”

 

“More than that, foreign capital is pulling out too fast.”p>

“KOSPI is growing, but the risk is too high.”

 

“We’ll have to raise interest rates though.”

 

KH Capital, true to being elites gathered from various securities companies, quickly analyzed the causes.

 

In fact, this won weakness couldn’t be explained by just one simple reason.

 

The burden of household debt, and the resulting pressure for interest rate hikes.

 

Korea couldn’t raise interest rates while the United States was raising theirs, making the market less attractive.

 

Political risk also played a part.

 

“Due to these complex causes, bubble theories about the AI industry that had been leading the index recently are emerging, the unicorn company NextMove collapsed, and distrust is growing toward Arkon, one of the pillars leading the data center sector, causing funds to move toward safe assets.”

 

Gold prices hit historic highs and dollar purchases were accelerating.

 

The dollar index itself was falling, but that didn’t mean less funds were flowing into dollars.

 

“At least we’re fortunate. Since we hold most of our funds in dollars, we’re actually benefiting.”

 

KH Capital’s current capital approached 200 million dollars.

 

Including bonds, it exceeded 600 million dollars.

 

Assuming exchange rates would rise further, surpassing 1 trillion won wouldn’t be a problem.

 

“What do you think will happen going forward?”

 

At Kim Seong-won’s question, Kang Hyeon silently stared at the won/dollar exchange rate chart.

 

From the chart, it appeared the current government was also releasing funds to defend the exchange rate.

 

There was pressure pushing down whenever it tried to rise.

 

The question was how long that would last.

 

“It depends on what the government does.”

 

The government still held the key.

 

* * *

 

As the exchange rate rose significantly, the domestic market atmosphere grew heavy.

 

“The exchange rate is rising too much, isn’t it?”

 

“Can’t the government stop it?”

 

“I wonder if the IMF might come again.”

 

“If the IMF came, that would be fortunate. In the current situation, there’s no clear exit strategy.”

 

“We’re lucky since our overseas portion is high, but teams with high domestic exposure must be in chaos.”

 

Being close to the economy in Yeouido, they felt the impact immediately.

 

Of course, not everyone was affected.

 

Cases like KH Capital with high dollar exposure weren’t greatly shaken.

 

“All positions in our currently held stocks continue to rise.”

 

“There are no particular issues within the United States either.”

 

The United States was also quiet.

 

The negative news that had been pouring out until recently felt like a lie.

 

“Regarding the Dubai media that recently published negative articles about Arkon, Reporter Mccauley posted an investigative piece on his blog. He said their office was empty.”

 

The media that had published Arkon articles was also fake media.

 

In fact, such incidents were common in the financial industry.

 

The method of establishing SPCs in Dubai or third countries, releasing tabloid news to shake the market, then taking short positions for profit.

 

It was classic, but still a strategy that worked well in the market.

 

“The upward rally will continue for a while.”

 

Kwangho was right.

 

If he were currently employed at a company and operating individual AUM as a trader, he would have gone long.

 

But not now.

 

‘The light has weakened to continue the upward rally.’

 

The light visible in the chart was very weak.

 

This meant the upward momentum was weakening.

 

Especially Arkon’s red light was almost disappearing now.

 

There was only one thing to do here.

 

“Starting today, we’ll close out the positions we’ve accumulated one by one.”

 

The employees’ eyes widened.

 

They had just been talking about an upward rally, and suddenly position closing?

 

But they no longer doubted.

 

“Understood.”

 

“Let’s prepare right away.”

 

Kang Hyeon’s position within the company was absolute.

 

Not simply because he had money and was the CEO.

 

‘If the CEO says so, then it’s going to fall.’

 

‘The upward rally is ending.’

 

His 100 percent win rate spoke for itself.

 

That Choi Kang-hyeon was a monster.

 

* * *

 

KH Capital began closing out their positions.

 

This news also reached Richard Blake at JP Morgan.

 

‘As expected, he doesn’t hold long-term.’

 

Though he earned astronomical profits from single trades, Kang Hyeon didn’t hold those positions for long.

 

His technique of hitting at precise timing and pulling out was excellent.

 

‘But if Choi Kang-hyeon started selling, does he think the risk is high as our analysts were saying?’

 

When Kang Hyeon bought bonds and purchased CDS for hedging, Richard Blake had spoken to higher-ups to conduct an overall market review.

 

This was a kind of anxiety that arose from experiencing the subprime mortgage crisis and Lehman Brothers bankruptcy.

 

Back then, two entities that supposedly wouldn’t collapse fell consecutively, bringing the world economy to the brink of destruction.

 

But even in that situation, there were eccentrics who predicted the market and made money.

 

‘History repeats. If we want to continue, we need to recognize the eccentrics.’

 

Richard convinced his superiors to conduct an overall market review and decided to partially close long positions.

 

This was to prepare for any contingency.

 

‘I wonder how this will unfold?’

 

Will the music stop?

 

Or will it continue to flow?

 

Richard’s gaze turned toward downtown Manhattan.

 

* * *

 

KH Capital closed all positions over the course of a week.

 

“Bond losses have also been confirmed, a 30 million dollar loss from the previously purchased 350 million dollars.”

 

An 8.6 percent loss.

 

Looking at the simple loss rate alone, it was a considerable figure.

 

But it wasn’t a big problem.

 

“What about the CDS side?”

 

“Currently showing 135 million dollars in profit.”

 

Since they had hedged with CDS, the current net profit exceeded 100 million dollars.

 

With the exchange rate at 1,460 won, it was over 146 billion won in profit.

 

Adding the profits from stocks sold on the way down and bought on the way up, totaling about 160 million dollars.

 

After returning the 42 million dollars borrowed from JP Morgan and paying fees and interest, their available funds became 468 million dollars.

 

‘Including CDS, it exceeds 600 million dollars.’

 

Adding the value of KH Construction and Yeongjong Island land, it became assets in the trillion-unit range.

 

The assets that started with a thousand bitcoins and 174 billion won had grown nearly sevenfold.

 

‘Making money is this fun.’

 

When he first found Bitcoin, he thought he should spend the money rather than make more.

 

But now the story was completely different.

 

Making money itself was enjoyable.

 

Above all, knowing the answer and working through it was uniquely fun.

 

“Sir, shall we build short positions?”

 

At Seong-won’s question, he shook off his idle thoughts and looked at the chart again.

 

‘The dark light spread across the sector has grown stronger. The time for the bubble to burst is approaching.’

 

It wasn’t just the light.

 

The current market movement was the same.

 

Arkon’s stock price was rising, but its credit rating was falling.

 

This meant one thing.

 

‘The market doesn’t trust Arkon.’

 

In this situation, if one trigger was fired, Arkon could collapse.

 

“We’re going short on Arkon and other data center stocks.”

 

“Short selling?”

 

“Yes. Arkon will have a high proportion, but we plan to include other data centers as well.”

 

“Do you think the data center sector will collapse?”

 

It was Kwangho’s question.

 

Everyone in the current market expected the AI bubble.

 

But they didn’t know whether it would burst or not.

 

Taking short positions in this situation ultimately meant expecting the bubble to burst.

 

Since Kang Hyeon’s recent accuracy was ghostly, he was curious about his opinion.

 

And Kang Hyeon answered decisively.

 

“Yes, I believe so. Sixty percent of our total funds will go into data centers.”

 

Sixty percent of $468 million.

 

$280 million would go into short positions.

 

“Of that, we’ll build more than half our short positions in Arkon.”

 

“Yes!”

 

Kang Hyeon began moving again.

 

* * *

 

KH Capital began taking short positions.

 

Due to the large amount, they moved in installments rather than all at once.

 

This time they utilized accounts at not only JP Morgan but also Morgan Stanley and Goldman Sachs.

 

The reason for using multiple accounts was to minimize position exposure.

 

Of course, JP Morgan held the largest proportion.

 

‘With the track record we’ve built, loans come through faster too.’

 

JP Morgan also had the most comfortable margin call capacity.

 

“We’ve built 70 percent of our short positions so far.”

 

Hearing Kim Seong-won’s report, Kang Hyeon fixed his gaze on the chart.

 

‘The light is getting stronger and stronger.’

 

It meant an event would soon explode.

 

Then Kim Ha-ryul approached and handed him a report.

 

“I’ve compiled upcoming events in the United States.”

 

“Thank you for your hard work. Please share any urgent news from the US immediately.”

 

“Yes.”

 

As Kim Ha-ryul returned to his seat, Kang Hyeon immediately checked the events.

 

‘Quarterly earnings announcements continue next week. If it explodes, it’ll move big here.’

 

If Arkon, which had already lost credibility, also had poor earnings, the market would definitely react strongly.

 

The event trigger was likely to explode here.

 

“How’s the CDS reaction?”

 

“No major movements. Same for the bond market. Stock prices are also maintaining sideways movement.”

 

The market also seemed to be waiting for quarterly earnings.

 

Days that perfectly fit the phrase “calm before the storm” continued.

 

* * *

 

While Kang Hyeon was building short positions, stock prices were rising daily.

 

Naturally, investors took long positions and recorded high performance daily.

 

-Let’s go!!

 

-NASDAQ is god!!

 

-Money gets copied when you do stocks. Why do crypto? Why work?

 

-We’re foreign currency earning warriors bringing in dollars!

 

-They say there’s a dollar shortage these days? We’ll earn tons!!

 

-Is it okay to buy now?

 

└When you ask if it’s okay to buy, that’s when you should buy.

 

└When you hesitate to buy is historically the lowest point.

 

-Full loan investment let’s go!!

 

└That’s a bit…

 

└Loan investment is the most dangerous.

 

└Then when will we make money!!

 

Individual investors continuously increased their stock investment amounts.

 

Historically, the most individual investors were pouring money into the US stock market.

 

And this wasn’t just individual investors’ story.

 

“Buy Arkon.”

 

“More, sir?”

 

“Yes. Forecast reports are coming out saying this quarter’s earnings will be higher than expected.”

 

A subordinate asked about Choi Chang-wook, David’s order.

 

“May I know which report that is?”

 

“Damn! Put in the order quickly instead of asking!”

 

“Yes, yes. Understood!”

 

Confirming the order went through, David’s lips curled up.

 

‘This confirms this quarter’s bonus too.’

 

Incentives and bonuses were determined based on performance.

 

He thought it might be a bit lacking, but the possibility of hitting it big in the final quarterly earnings emerged.

 

‘The Dubai report is concerning, but the possibility of the AI sector collapsing is low.’

 

The report he referenced came from Dubai.

 

Of course, Dubai media’s credibility was low.

 

But he didn’t think the AI sector would collapse.

 

This wasn’t just David’s judgment.

 

“Increase data center purchases.”

 

“What are you all doing? Are you going to move after the earnings surprise explodes this quarter?! Buy quickly!”

 

“Focus on buying data centers! Nvidia is expanding investment!”

 

“AI usage hit an all-time high! Naturally server proportion will increase. Definitely buy!”

 

Other institutions also heated up buying in the AI sector.

 

This movement naturally led to rises in indices and the AI sector.

 

Before winter, expectations continued that earnings surprises would occur in the final quarter.

 

Meanwhile, KH Capital quietly and steadily built short positions.

 

“Position building complete.”

 

And three days before quarterly earnings, they were able to build all positions.

 

“Currently $374 million in funds went into positions, with a position size of $1.122 billion.”

 

Thanks to utilizing 3x leverage, the position size grew large.

 

The annual interest alone was $82 million, $220,000 per day. An amount equivalent to 300 million won was being deleted.

 

But Kang Hyeon watched the market without wavering.

 

‘All preparations are complete.’

 

Now all he had to do was wait.

 

* * *

 

The day of earnings announcement.

 

The eyes of investors worldwide were focused on the news.

 

And before the market opened.

 

Arkon released their earnings announcement.

 

[Arkon Earnings Announcement! $13 billion, 7% growth compared to last year!]

 

Along with news of Arkon’s rising performance, stock prices began to climb in the after-market.

 

And as soon as the market opened, explosive buying pressure occurred.

 

Naturally, the proportion of individual investors was higher than ever.

 

But Kang Hyeon silently waited for the news.

 

In his eyes, he could see Arkon’s light had turned blue.

 

“Arkon’s stock price has risen 5 percent.”

 

Even while listening to Seong-won’s report, Kang Hyeon didn’t move.

 

“This is the earnings announcement data released by Arkon.”

 

He checked the data that Kim Ha-ryul had brought.

 

The performance itself was certainly good.

 

But these were numbers anyone could have predicted.

 

The important thing was.

 

[CAPEX : $6.8B]

 

[Annual CAPEX Guidance : Maintained]

 

CAPEX, simply put, referred to the costs spent on fixed assets purchased for a company’s future profits.

 

Scrolling down revealed where the costs had gone.

 

[AI Data Center : 85%]

 

Almost all costs had been spent on the Data Center.

 

But the costs themselves still weren’t that large.

 

With Arkon’s market cap approaching $600 billion, their CAPEX spending was just over 1 percent.

 

This level wasn’t a big problem.

 

The problem was the data written below.

 

[New Data Center Average Utilization Rate : 62%]

 

[Break-Even Point (BEP) Utilization Rate : 78%]

 

This meant one thing.

 

‘The more money they spend, the more losses accumulate.’

 

And this wasn’t just Kang Hyeon’s thinking alone.

 

“Huh? Arkon’s stock price is falling! It’s given back 3 percent, now up only 2 percent…! No, it’s down to just 1 percent!”

 

The market was thinking the same way.

 

“It’s given back all gains and turned negative!!”

 

The music was stopping.

—————
This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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