From Loans to Leverage : Amazing AI’s Smart Path to 100x Crypto Exposure
“…Our strategy is to own a basket of digital assets. We are taking positions that enable us to take 100 times the exposure but also protect the downside…”
With regulators putting the brakes on digital asset treasury-only companies, those enterprises wanting to accumulate crypto positions whilst gaining stock market approval must demonstrate a proportionate core business that generates at least 50% of the group’s revenue.
Amazing AI has just that. The backbone of the business is online consumer loans and AI finance related services which founder and CEO Paul Mathieson says generates gross returns of 60% per annum on its loan portfolio “netting around 30% after all costs” which include any bad debts that can come with the lending business.
The way therefore is clear for the company to create its digital asset treasury and one that thrives on the volatility associated with crypto assets. Mathieson won’t be rushed though and waited for the opportune moment in early November to make the first digital asset purchase having fended off some investor demands to just get on with it.
“If we’d gone in all at once a month ago, we would have been at the peak and we would have lost up to 50% on our position as opposed to today where we’ve made our first acquisition at close to three-month lows.”
The strategy now is selective purchases along the lines of a daily dollar cost averaging mechanism, and as Mathieson explains the company is “taking positions that enable us to leverage or increase the upside up to 100 times the exposure and also protect on the downside if Bitcoin and other crypto assets fall away.”
He then explains the maths that clarify that ‘100 times’ ambition. “We are able to buy call options over the digital assets that enable us for 1% of the cost to get 100 times the exposure. So if Bitcoin was to go to a million dollars over the medium term, instead of having exposure to one Bitcoin for every dollar spent, we have exposed to a hundred times that utilizing sophisticated strategies in the option market.”
The volatility in the digital asset markets doesn’t faze Mathieson as this he argues works in Amazing AI’s favour. “Our strategy is all about taking advantage of volatility and we diversify that over five different digital assets. So we would only need one of the five to go up a decent amount or down a decent amount to make money. So we think our strategy is much more advanced than a simple raise money, buy Bitcoin and hope for the best.”
That ‘hope for the best’ commentary might just be a side swipe at some other mainly digital asset treasury companies that are floundering without a proportionate core business. It’s these enterprises, Mathieson explains to Sarah Lowther in this interview, that provide his company with acquisition opportunities that his strategy could turn around.
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The author was remunerated but does not hold shares in the company
