Form 144 RECURSION PHARMACEUTICALS For: 7 April

This is a risk disclosure: trading financial instruments and cryptocurrencies involves high risk, including the potential loss of some or all invested capital, and trading on margin increases those risks. The note warns that crypto prices are extremely volatile and that Fusion Media's data may not be real-time or accurate, disclaims liability, and provides no market-moving information or actionable financial data.

Analysis

Regulatory friction and opaque data provision raise a structural premium for regulated on‑ramps, custody, and audited market data. Those providers can monetize trust via higher fees, lower capital charges from institutional counterparties, and product bundling (OTC + custody + reporting), producing 20–40% higher revenue per institutional client versus pure retail platforms over a 12–24 month onboarding cycle.

A key tail risk is a liquidity-driven flash unwind: concentrated margining, stale indicative prices, or an exchange data outage could force cross‑market arbitrage cascades within days. Over months, formal enforcement (fines, forced delistings, capital constraints) would reallocate flows into regulated ETFs, custodians, and bank‑sponsored wallets — compressing volumes (and revenues) at unregulated venues by an outsized multiple relative to price moves.

Contrarian angle: consensus treats regulation as a binary negative for crypto price action; instead, incremental clarity tends to rerate infrastructure providers and custody franchises materially higher while compressing dispersion across token issuers. If regulators push for mandatory transparency of price feeds and margining, expect a rotation: short high‑beta, undercapitalized trading venues and miners; long regulated exchanges, custody, and exchange‑listed fintechs that integrate on‑ramp/offs‑ramp services.

Key Decisions for Investors

• Pair trade (6 months): Long COIN (Coinbase) + short MSTR (MicroStrategy) — allocate 1.5% NAV to the pair sized dollar‑neutral. Rationale: regulatory clarity favors regulated exchanges/custody; target 25–35% relative outperformance for COIN vs MSTR; stop if pair moves 12% adverse intraday.
• Buy crypto volatility (1–3 months): Long a 1‑month BTC straddle using listed options or delta‑neutral futures + options for 0.5–1% NAV. Catalyst window: regulatory announcements/hearings; payoff if realized vol > implied vol (target >1.8x premium), cap loss to premium paid.
• Short unregulated miners/retail‑facing brokers (3–6 months) via put spreads on MARA/RIOT sized to 1% NAV total. Use buy 30% OTM puts and sell 15% OTM puts to limit cost; expect 30–60% downside on idiosyncratic enforcement or capital‑strain events, with max loss = premium.
• Long custody/corporate crypto infrastructure exposure (12 months): overweight regulated ETF/stock wrappers and custody services (e.g., FILLED via public custodians or targeted private allocations) — tactical 2% NAV overweight. Rationale: steady, recurring fee re‑rate if institutions prefer audited custody; target 2x Sharpe improvement vs spot crypto exposure over 12 months.