Motus Update: What We've Been Up To
- Motus Capital Management
- Jun 11
- 10 min read
Friends and partners,
While our monthly recaps to investors have become more thorough, we’ve not written in depth more broadly for a few months, so we wanted to take a moment to update you on what’s been going on at Motus. We’ll touch on activity within the portfolio, what we’ve been up to as a company, and what we’re watching in markets.
As the fund approaches 3 years in operation, we’re always looking for compelling investment opportunities, and as our reputation and network grow, so do the ways in which we can deliver for our investors. Building on our track record and growing AUMs, we are seeing more deal flow in terms of special situations and direct deals, and some are fantastic opportunities:
Portfolio Activity Highlights
“BTC Inc.”: With the help of David Bailin, Motus was introduced to a team bringing the first bitcoin treasury product to public equity markets in South America (launched out of Brazil). As details are not public yet, we’ll just refer to it as “BTC Inc.” The team boasts support from well-known bitcoin pioneers and large institutions, and they’ve worked with banks and regulators to tee up a novel BTC yield strategy.
For those who don’t follow other bitcoin treasury companies (like Microstrategy), they acquire BTC via a combination of structured capital markets raises and business operations. Since they’ve demonstrated an ability to grow their BTC held per share of public equity, these companies trade at a premium to the asset value of their treasuries.
In the case of BTC Inc., Motus is contributing BTC to the initial treasury in exchange for shares struck at a favorable NAV. If BTC Inc. never makes it to market for some reason, our downside is roughly that of holding BTC. However, if does list, we expect it to trade at a meaningful premium, generating 2x, 3x, or perhaps an even greater return for Motus in just a few months’ time. For comparison, premiums have historically been highest in geographies without great access to BTC—Japanese BTC company Metaplanet traded over 10x before settling around 4x—and in Brazil, there is not just improved access, but also a tax benefit versus holding BTC directly, which we expect to drive the multiple.
Motoswap: Motoswap is a metaprotocol that brings DeFi directly onto the Bitcoin network—a functionality long desired by the BTC community but previously not achieved. We met the team through our network, and we’ve remained close to them, introducing them to other investors and testing the functionality of the product as it nears launch. Because of this, we were able to secure discounted unlocked tokens directly from the team. Further, when another investor had to unwind operations, we acquired their tokens at a 50% discount to market price. We are excited for what Motoswap can become, and we’re also pleased to leverage our relationships to secure favorable entry points for our investors.
Hyperliquid: We’ve written much about Hyperliquid and think $HYPE and its ecosystem represent one of the best investment opportunities in years. It continues to generate more fees for token holders than any other protocol in crypto, including BTC, ETH, SOL, etc., and yet it has zero major exchange listings and a holder base smaller than many meme coins. Meanwhile, key performance indicators are making new highs:
But most coverage relates to Hyperliquid as an exchange, with relatively few people understanding its burgeoning ecosystem as a Layer 1 blockchain, like Solana or Ethereum. Since February, we’ve spent time with virtually every protocol building on HYPE. This is our edge—getting deeply involved in ecosystems and knowing them better than anyone else, in order to understand what’s novel, what’s succeeding, etc.. Our focus has been twofold—first, to meet and underwrite the ecosystem projects, and second, to make the $HYPE we own as productive as possible. Generally speaking, teams need to bootstrap liquidity to get off the ground, and in exchange for being an early depositor, supporter, or user, investors get “points” representing optionality on the protocol’s future token launch. As large holders who understand the ecosystem, we’ve been able to be solid partners to teams in need of liquidity, and we’ve been able to make direct deals with some for future tokens. As a result, we will be a top 10 holder for several protocols when they launch, and a top 50 holder for most. This gives us significant upside reflexivity to the success of the $HYPE ecosystem succeeding, without taking any additional risk versus what we already hold. We are farming free call options while supporting and getting to know builders.
As an aside, David had a viral moment when mentioning Hyperliquid on the Bloomberg Surveillance podcast. When discussing portfolio construction, the interviewer was flabbergasted to hear David say there are crypto tokens generating actual revenues that investors can consider as complements. “What’d you call it, a hyper liquid?” he asked. David’s full appearance, where he discusses markets, his CIO Capital Partners launch, and also touches on crypto, starts at 47:25 here: Bloomberg Surveillance: Tariffs and the Dollar
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None of the opportunities mentioned so far—BTC Inc., Motoswap, $HYPE, or Hyperliquid ecosystem farming—are traded on exchanges or readily available to even the savviest of DeFi users, highlighting Motus’ access. Of course, we also remain busy in “public” markets as well, but we wanted to share some of the more interesting ways we are creating value.
Industry Participation
As we seek to bolster our reputation (in pursuit of more and more access to opportunities for the fund), participating in industry events is something we will do more frequently. Many events are low quality, and we are selective with any activity that takes us away from our desks, but a few events are fantastic:
Recently we attended the Medici conference in Los Angeles, which is a highly selective CEO or Founder-only event of the industry’s top protocols and investors. Our purpose was to network with our peers and competitors, as crypto is still young enough an industry to be somewhat collaborative. While still in the works, we may have sourced a new investment there, and we were able to connect with dozens of other founders and portfolio managers.
In early June, we’ll attend Hedgeweek’s Global Digital Assets Summit in London, this time more with the aim of associating Motus with other top-level global funds. We’re also very proud to be shortlisted for several industry awards, with winners to be announced at the Summit. See the categories in which we’re nominated here: Hedgeweek Global Digital Assets Awards
Finally, we joined a collective of other portfolio managers for idea generation events, and we’ve met with multiple RIAs to better understand evolving investor demand for crypto.
What We Are Watching
Crypto Market Cycles: The crypto market remains in a BTC-dominant phase, and after the flush of February and March, most participants are reluctant bulls. Typically, a full-blown altcoin season follows BTC making new highs, however that hasn’t been the case for the last year. Some participants are suggesting we’re on the precipice of an altcoin catchup rally, while others cite BTC ETFs and increasing institutionalization dictating that this cycle will be different. They point to many alts failing to recapture their 2021 highs, and the fact that many have been around for years without delivering on their promise.
Motus’ view is a bit more nuanced—we notice significant dispersion amongst altcoins and an increasing preference for those that actually capture value. As we’re fundamental investors who have long wanted more rational pricing of alts, we see a year where there can be alts winners that far outperform BTC, but also where the majority of tokens that don’t actually accomplish anything no longer enjoy the free ride of altcoin season tailwinds. We think the “cycle” is no longer so straightforward.
To inform positioning, we’re keeping an eye on bitcoin dominance, crosses like ETH/BTC, regulatory clarity for alts that return capital to token holders, leverage in DeFi, retail participation, mindshare of meme tokens, and institutional adoption of DeFi, to name a few.
Legislation: The House and Senate are both advancing stablecoin bills. This is the simplest of crypto topics for lawmakers, and it makes sense to start with the low-hanging fruit. We expect progress in the coming weeks, however, this clarity is far less important to markets than the broader regulatory framework that will be tackled next. The definition of exactly what tokens are regulated, how, and by whom is far more important, as it dictates capital raising, regulatory jurisdiction, and has implications for token listings and value return mechanisms. The regulatory attack on crypto is over, thankfully, so now we’re finally focused on rulemaking and compliance to understand how they impact the industry and our portfolio companies.
Global Liquidity: Even more so than other asset classes, crypto is historically highly sensitive to global liquidity. This makes logical sense—stores of value like BTC are a hedge against runaway money printing, and most altcoins are emerging technology far out on the risk spectrum, meaning they benefit from low rates and speculation associated with easy money. Two areas on which we are focusing to understand the direction of liquidity are the US budget and the response to evolving global trade policy.
In terms of the crypto (mainly BTC) as a hedge against de-dollarization and money printing, the concept of DOGE and the promises of the Trump administration to rein in spending are basically austerity measures with euphemistic names. Generally speaking, these should cause pain to markets in exchange for long term debt sustainability. While we don’t root for the administration to fail at its goal to reduce the US’s increasingly untenable debt, deficits and debt monetization are very bullish crypto. So far, we’ve seen DOGE underdeliver on its promises, Congress fail to take seriously enacting DOGE proposals, and a budget with another $2T deficit (~6.2% of GDP). This is the opposite of austerity and a definitive tailwind for crypto as of now, but we’re watching carefully what the administration can actually get done to reduce the spending, which would slow liquidity.
In terms of trade policy, tariffs have no direct impact on crypto, as decentralized protocols are borderless. However, the response to trade policy has an immense effect. So far, in response, we’ve seen significant easing and stimulus from China, stimulus from Europe, and most major economies are biased towards easing, even if they’re waiting out the uncertainty. The Fed’s path is also uncertain, yet at the same time, deficit spending continues, and all signs point towards an expanding money supply both at home and abroad. In sum, this is currently another tailwind for liquidity and crypto, but the news cycle in this administration moves incredibly fast, and much of the most extreme policy has already been walked back. We continue to monitor.
Stablecoin Flows and DeFi Leverage: Stablecoin issuance has expanded for 19 straight months to an unprecedented peak of ~$250B—a strong indication of increasing institutional demand, even before anticipated U.S. legislative developments. Often, this is a leading indicator of prices appreciating, but with institutional adoption and payments on chain growing rapidly, we are less confident newly minted stables will find their way into buying other crypto, as has happened in the past. That said, the trend is worth following, especially if informed by the expansion of credit within DeFi. Strong expansion of stables plus strong increases in DeFi credit are likely to first foreshadow rising prices (until ultimately causing deleveraging), and so we monitor both.
Emergence of Crypto Treasury Companies: We wrote earlier about BTC Inc., and we are very excited for its listing. There is no other BTC treasury company in the Global South, and we expect it to be a market leader. We are also happy to see multiple treasury strategies launch in the US, some with fantastic recent success (see Cantor Equity Partners, $CEP). Issuers are launching not only with BTC treasuries, but now with SOL and ETH treasuries, too. This may have originally been concocted because of regulatory restriction—if there couldn’t be ETFs for crypto, treasury companies were a market response to the demand, but now their NAV premiums have attracted copycats, and for tokens with certain characteristics, the playbook makes even more sense. For example, if a SOL treasury company cannot only issue debt, but also stake and even run a validator to extract revenues in technical ways, this generates additional money to buy SOL. What does that do to the relative attractiveness of a SOL ETF?
Critics point out these strategies are partially reliant on their NAV premiums, and they worry that if more competitors emerge, premiums may end up subsiding. We don’t fully agree with this—new entrants without debt are in a better position to generate treasury yield and hence should command higher premium, assuming they reach critical mass. Perhaps saturation just means fewer new issuers get critical mass. Other critics worry this is a systemic risk, should the leverage unwind, but again we don’t agree—a vast majority of the leverage is convertible to equity and would simply dilute shareholders rather than causing an unwind.
Regardless, this is an interesting new variable for crypto investing and a novel concept for the crossover of crypto and equity capital markets. We’re excited to see how it evolves.
Protocol-Specific Monitoring
$HYPE: Recently achieving all-time highs in both Open Interest and Total Value Locked (TVL), and having implemented an updated fee schedule, and having the EVM go live, there’s no shortage of metrics to watch. We are mostly focused on the EVM side and the newly open-sourced ability for external parties to launch perpetual markets on Hyperliquid.
$AAVE: Having crossed the significant milestone of $40B in borrow/lend volume, $AAVE is important to monitor from the perspective of both adoption and crypto leverage in the system. While it is one of the oldest and largest DeFi protocols in existence, value accrual to tokenholders has just begun with buybacks from revenue beginning April 9th.
$PENDLE: On the cusp of launching an innovative DeFi primitive and extending access to its platform across multiple new blockchain networks, we are monitoring progress and developments.
$MOTO: The precondition for Motoswap to go live is OP_NET, the metaprotocol on Bitcoin that facilitates smart-contract functionality. Test net is now live, and we’re focused on its traction and success as it relates to $MOTO. In its first two weeks, OP_NET has reached over 1MM transactions:
As always, we deeply appreciate your trust and partnership. Should you have any questions or wish to discuss our strategies and outlook in greater detail, please don't hesitate to reach out.
Warm regards,
Team Motus
Past performance is not indicative of future results. This communication does not constitute an offer to sell or solicitation of an offer to buy the Interests in any jurisdiction where, or to any person to whom, it is unlawful to make such offer or solicitation in such jurisdiction. This communication is being provided solely as a high-level overview and is not intended to be relied on for the terms of any offering. Motus Capital Management has or may hold a financial interest in the assets mentioned. Full disclosures can be found here.
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