Breaking Up Is Better Than Divorce

Crowdsale

“I want to borrow $100 million worth of funds and stocks in safe assets as collateral. Is it possible?”

Eugene made a new request to William.

“Of course it’s possible. How much do you want?”

“Please find out as much as possible.”

Now is the time to start the race in earnest.

“I do that.”

William readily replied.

“Up to $75 million possible.”

The next day, the borrowing size was determined immediately.

“I want you to look into oil hedging insurance. The $75 million we borrowed this time is what we plan to put into it.”

“How can we find out under what conditions?”

“If the price of WTI goes below $50 within six months, the right to exercise is possible.”

“Because it’s under $50, you know that it hasn’t dropped that much since 2008, right?”

“yes. I read it in the report.”

Eugene said while holding up a report on oil prices issued by BlackRock, which he always carries with him.

“It has never been so down since the global financial crisis. However, it didn’t take long for it to return to its original state due to negotiations on production cuts.”

“And you also know that the war that the Islamic Levant rebels are starting can have as much impact on oil prices as the Iraq war, right?”

“of course. If a couple of oil fields are blown out of Iraq, the price of oil will rise.”

“Nevertheless, you are betting almost all your fortune on the drop in oil prices.”

“I thought it was worth a walk.”

“All right. If you are sure, we will proceed.”

William answered with a still disgruntled face.

“To be honest, even if I do that, I have nothing to lose at BlackRock. They receive a small fee for maintaining the $200 million asset, and interest income is also generated from the $75 million borrowed this time. Also, the commission for relaying the hedging insurance to the investment bank is quite high.”

William’s words were long.

“On the other hand, there are many risks that Eugene has to bear. You must have thought about it enough, but I would recommend that you give it a little more thought. $50 is too risky. Even if it was only $70, I’m sorry if it sounded off-topic.”

It seems that they do not like this request at all.

“I have thought about it enough. Perhaps this will be a great opportunity for me. If it doesn’t work out the way you think, there’s nothing you can do about it. Anyway, thanks for the advice.”

Eugene flatly rejected William’s advice.

“All right. Then we’ll hit the investment banks right away.”

William answered with a still puzzled expression.

“What is hedging insurance?”

Yoosung asked as he left Black Rock that day.

“Think of it as an option. It’s just a contract between the institution and the institution, unlike what’s on the options trading market. Usually, hedging means a means to avoid risk. So, in case the oil price jumps too much, oil importers pay insurance on the condition that they receive insurance money when the price of oil exceeds a certain level. let’s go.”

“Even in an oil-producing country?”

“Mexico is famous for that kind of hedging. I have already maintained long-term hedging insurance since the early 2000s. In 2008, you would have benefited quite a bit from that.”

“By the way, hyung is not an importer or exporter, is he?”

“uh. It doesn’t matter though. In the modern investment banking industry, that kind of insurance product is traded with or without cash. It’s kind of like gambling. It’s betting each other on whether a particular product will reach a certain price or not.”

Yoosung shook his head.

“Do you accept that?”

“If we think that the price of oil is unlikely to drop by $50 in six months right now, we will issue insurance at an appropriate fee. And the investment bank will calculate the risk and set the appropriate premium and insurance amount.”

“Then you’re saying it’s actually a product for sale?”

“uh. However, not everyone can make an insurance product by going to an investment bank and making one. Usually a big trader, an oil producing country, or a fund.”

It was for this reason that Eugene ran to Black Rock as soon as she received the Mega Millions winnings.

There are experts in that kind of negotiation, and there is no single asset manager who manages the best assets in the world with the most experts and the best negotiating power.

There is no place like BlackRock in terms of transaction reliability.

In return for paying a small fee, Eugene gains many benefits.

The biggest thing is time.

If he had set up his own investment company or tried to hire an investment expert, it would have been delayed by at least a few months.

By then, the oil price would have already shown a clear decline, so it would have been difficult to sign a hedging insurance contract.

“We have negotiated with five investment banks to issue hedging insurance.”

Eugene was able to sign all the contracts he wanted within a few days.

“JPMorgan Chase, Evercore, BNP Paribas, Deutsche Bank and Lazard have agreed to receive $15 million each. You can exercise your rights if the WTI price goes below $50 for 180 days from now. As the exercise period is short and the target price is less than 50% of the current price, the premium paid is 19 to 23 times the premium.”

Each investment bank did not perform the same calculation, so the output was inevitably different.

By the way, I was a little surprised that Black Rock didn’t accept anything. Did you notice any danger?

“thank you. Thanks for your efforts.”

Eugene was very satisfied with the better result than expected.

“Hoo will will by will by will by going to say that the oil price of each bank does not see a 5% chance that the price will drop in half within six months.”

William had a darker expression than when he was asked to hedge by Eugene. He must have thought he had blown 75 million dollars into the air.

“I don’t think I need to go to work every day at BlackRock anymore.”

After William returned, Eugene said to Yoosung.

The position will remain the same anyway, all that remains is to watch.

“To do. We’re not even Black Rock Temple.”

Eugene’s frequent visits to Black Rock is not just for the purpose of checking his investment in real time.

As my time at Black Rock increased, my acquaintance with the Black Rock managers deepened.

Now that I have a proper friendship, I thought I could stop going to and from work.

If an important event occurs, BlackRock will contact you.

“Ethereum pre-sale has started.”

Shortly thereafter, the long-awaited Ethereum crowdsale began.

It started selling Ethereum, which has not yet been developed, through its own page.

“The initial sale price was set at 2,000 Ether per Bitcoin. It’s only for the first 14 days at this price, and then it’s going to go up little by little. The sale period is 44 days, and each person can purchase up to 12.5% of the total issued quantity.”

In the meantime, Yooseong, who had been paying attention to Ethereum sales under Eugene’s instructions, informed the situation.

“So you can buy it even a little cheaper if you buy it within the first 14 days. Since the price of Bitcoin today was $620, it is roughly 0.31 cents per Ether. If you go backwards, it could go up to half a dollar.”

“How are the sales so far?”

In fact, this is the most important thing for Eugene.

We only knew that the initial price of Ethereum was very low, so we had no idea how many were sold in the first place.

Eugene wanted to buy as much Ethereum as possible, but if the initial sales volume is low, the amount that can be purchased will be limited.

Considering the impact it will have on the price of Ethereum in the future, wouldn’t it be impossible to buy half of it alone?

“Less than 8 million on the first day alone.”

I was relieved by Yooseong’s answer.

He was thinking that he would be lucky if he could only purchase 1 million pieces.

If it had sold that much on the first day, Eugene would have been able to actively buy it.

“How much do you plan to buy?”

“Ummm… I’m thinking of putting all my spare money into it.”

After investing $200 million in stocks and futures, there is still a lot of money left.

For Yoosung, out of the $5 million loan to his brother, $3 million remaining after deducting the $2 million he invested in his father’s company.

And even though Eugene spent a lot of money to build a house in Trump Tower, he had about that amount of extra money.

“Are you okay? Putting this big sum of money in a digital asset that no one can measure?”

Yoosung asked worriedly.

It’s a completely different situation from when you bought a few hundred dollars a day with the money you had before winning the prize.

“That’s what investing is. The more you risk blowing it, the more you can earn.”

“High risk, high return, I know.”

But for Eugene, it is a no-risk, high return.

No, this should be about a mega return.

Even if you take it conservatively, it guarantees a return of 3,000 times over three years.

If you have a little more leeway, even a 10,000-fold return is ridiculous.

A magical event awaits them, turning a million dollars into 10 billion dollars.

“Then let’s buy only 1,000 bitcoin worth today.”

“uh? So… 620,000 dollars? 2 million ethereum? Is it okay to buy so many ethers? Are you being drawn to too few people?”

“It doesn’t matter. After all, coins are a market dominated by a few whales.”

“whale?”

“uh. People who enter the market with a small amount in investment markets such as stocks are called ants, right?”

“uh. I think you’ve heard of some kind of ant rebellion.”

Eugene nodded and continued.

“An individual who manages funds that cannot be compared with such ants are called super ants. But among those super ants, people with different assets are called whales. It could be an institution, not just an individual. In any case, these whales own half of the actual issuance in circulation, sometimes more than 90%, and control the market at will. Whales can raise their prices if they want to raise them, and lower them if they want to lower them.”

“Isn’t that an unfair game then?”

“Of course not. If you did that in the stock market, you’d be caught right away. However, since coins are not recognized as securities, they are not against the law.”

“ah······.”

“So don’t worry and buy it.”

“okay.”

On that day, the two brothers each acquired 1 million Ethereum.

As of January 2018, this amount would be worth $2.8 billion in $1.4 billion each.

By September 2021, it will be worth nearly $10 billion.

It didn’t even end there.

“For the time being, I plan to monitor the sales situation every day and accumulate from 10% to 30% of the quantity sold that day.”

“okay. I’ll take care of this here for the time being. But buying coins with only a laptop and seeing the futures stock market makes the screen a bit frustrating.”

It seems that the laptop screen was a pity as I got used to the black rock where the large screen filled one side of the wall.

“Then why don’t you buy a monitor? not. It would be better to set up a few computers. You can make a room into a studio on your own.”

“uh? So can I buy it without any cost restrictions?”

“Of course.”

“okay! wait!”

On that day, for the first time since winning the Mega Millions, Eugene was able to see his younger brother genuinely happy.

A few days later, one of the rooms in the house was decorated with a work room that was as good as an asset management company’s dealing room.

One wide wall was filled with six extra-large monitors, and medium-sized monitors were lined up next to it.

In addition, four desks were again equipped with multi-monitor equipment.

“Heh heh…”

Yoosung was very happy to see the studio he had installed.

“That monitor is oil futures, that index fund, and that hybrid fund…”

Each product he invested in was installed so that it appeared on each monitor, so that when you enter this room, you can see the status of each product at a glance.

“Good job.”

“It’s been a long time since I’ve had something so rewarding.”

After all, this kind of thing seemed right for Yoosung.

The two brothers’ work revolved around that studio now.