Bitwise Asset Management

Phase A — Understand the business

Lens 1 · Company Overview

Bitwise is a pure-play crypto asset manager — it builds regulated wrappers (ETFs/ETPs, index funds, SMAs, private funds, staking products, and now tokenized funds) that let financial advisors, institutions, and retail investors own crypto through the rails they already use, instead of opening an exchange account and self-custodying. Founded 2017 in San Francisco by Hunter Horsley (CEO, ex-Facebook/Instagram product manager, Wharton econ) and Hong Kim (CTO, engineering). Their first product — the Bitwise 10 Crypto Index Fund — was the first US crypto index fund.

• What it actually is: a fee-on-AUM business. Bitwise earns a management/sponsor fee on assets in its wrappers. The model is structurally identical to a traditional ETF issuer (BlackRock, Fidelity), only the underlying is crypto — which means revenue is a near-linear function of (assets) × (crypto price) × (fee rate), all three of which are moving against it in mid-2026 (see Lens 5/12).
• Scale: >$15B in client assets across 40+ products as of 2026, up from ~$11B (Apr 1, 2025) and ~$10B post-spot-ETF-approval (2024). The jump from "single index fund (2017)" to ">$15B (2026)" is the headline.
• Customers: advisor-led. Horsley's stated thesis is "build for the way most people actually buy an asset class — through an advisor using a regulated product". So the buyer is the RIA/wirehouse channel, not the crypto-native retail user — a deliberate, differentiating choice (see Lens 3). customers.csv is empty; channel mix is n/a — private, not disclosed.
• Flagship products:
• BITB — spot Bitcoin ETF (launched Jan 11, 2024), 0.20% fee, ~$2.4B+ AUM.
• BITW — Bitwise 10 Crypto Index ETF (the original fund, now an exchange-traded product).
• BSOL — first US spot Solana staking ETF (Oct 28, 2025), 100% staked, 0.20% fee.
• BHYP — first US spot Hyperliquid ETF with in-house staking (May 15, 2026), 0.34% fee.
• BITQ — Crypto Industry Innovators equity ETF (crypto-exposed stocks), ~$431M AUM.
• Bitwise Crypto Carry Fund (USCC) — first tokenized fund (cash-and-carry yield), taken over from Superstate June 1, 2026, ~$259M AUM, 0.75% fee, 4% yield.
• Contract structure: no take-or-pay; pure asset-based fees with no lockups (ETF shares are daily-redeemable). That is the worst possible revenue durability profile for an asset manager — money can leave on any down day (see Lens 12 bear).

Lens 2 · Supply Chain

Bitwise sits in the middle of a crypto-ETP value chain. Named stakeholders along it:

Underlying networks (Bitcoin, Solana, Hyperliquid, Ethereum)
 │ (price + staking yield)
Custodians → Coinbase Custody, others (hold the spot crypto)
 │
Staking infra → Bitwise Onchain Solutions, powered by Helius (Solana staking)
 │
 ▼
 ┌──────────────────────────────────┐
 │ BITWISE ASSET MANAGEMENT (sponsor/IM) │ ← earns the fee
 └──────────────────────────────────┘
 │
Fund administrator / auditor / transfer agent (bundled into the 0.20–0.34% fee)
Authorized Participants + market makers → create/redeem ETF shares
 │
Exchanges → NYSE Arca / Cboe (listing venue)
 │
Distribution → RIAs, wirehouses, broker platforms (Schwab, Vanguard, Fidelity now carry third-party crypto ETFs)
 │
 ▼
 End investor (advisor client, institution, retail)

Chokepoints & single-source dependencies:

• Custody is the critical chokepoint. Spot ETFs depend on a small set of qualified crypto custodians (Coinbase Custody dominates). A custodian failure/hack is a systemic risk Bitwise does not control.
• Staking infra (Helius) is a named dependency for BSOL's yield — a third party powers a feature Bitwise markets.
• Distribution is the real moat-or-death node. Bitwise does not own a brokerage; it rents shelf space on platforms (Schwab/Vanguard/Fidelity) that also issue or could issue competing products. Bitwise is a supplier to its own potential disruptors (see Lens 13).
• supply-chain.md for the crypto beat is missing — this map is web-derived.

Lens 3 · Competitive Advantages (moats)

Bitwise's moat is narrow but real, and it is not scale — BlackRock and Fidelity dwarf it on AUM. The durable edges:

1. Crypto-native brand + research credibility. In a category where advisors are nervous, Bitwise is the trusted specialist voice. CIO Matt Hougan (ex-CEO of ETF.com and Inside ETFs) is a genuine ETF-industry insider who speaks the advisor's language. This is a distribution-trust moat, not a cost moat.
2. Product-velocity / first-mover on the long tail. Bitwise was first to a US spot Solana staking ETF (BSOL) and first to a spot Hyperliquid ETF (BHYP). Against BlackRock — which is deliberate and BTC/ETH-focused — Bitwise wins the altcoin/yield/tokenization frontier by being faster and more willing. This is the single best part of the thesis.
3. Vertical integration into staking (Bitwise Onchain Solutions) lets it capture staking yield and offer "yield + exposure" products competitors can't easily match.

What it is NOT: there is no cost moat (it competes on fee, and is losing the absolute-cost race — see Lens 12), no meaningful switching cost (ETF shares move freely), and no network effect. Bargaining power is weak: it needs the distribution platforms more than they need it, and it needs the custodians more than they need it. The moat is "be the trusted specialist who ships the product nobody else will, first" — durable only as long as it stays first and the majors stay slow on altcoins. positioning.md / bottlenecks.md for crypto are missing; moat read is web-derived.

Lens 4 · Segments

Bitwise does not disclose segment financials — it is private. segments.csv is empty. A qualitative product-line breakdown of the >$15B AUM:

• Geography: US-centric, with a European foothold from the 2024 ETC Group acquisition (London-based crypto ETP firm) that took AUM to ~$4.5B at the time, plus offices in SF, NY, London. Geographic split n/a — not disclosed.
• Read on the mix: the growth is migrating from low-fee spot-BTC commoditization toward higher-fee altcoin/staking/tokenized products (BHYP 0.34%, USCC 0.75% vs BITB 0.20%). That is the right strategic direction — fee-mix up-trade — but it is also the riskiest, most cyclical end of crypto (see Lens 12/13).

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Phase B — Measure performance

Lens 5 · "Earnings Result" → Funding & valuation trajectory (+private swap)

No earnings print exists. The +private substitute is the capital-raise + AUM trajectory — the closest read on the company's financial health.

• Latest round: Series C, $70M, Feb 25, 2025, led by Electric Capital, with Blockchain Coinvestors, Highland Capital, Khosla Ventures, MIT Investment Management Co., MassMutual, Haun Ventures, ParaFi Capital, and General Catalyst participating.
• Total equity raised: >$80M. Prior reference point: a June 2021 valuation of ~$500M. The Series C valuation was not disclosed — n/a. PitchBook/CB Insights carry it behind a paywall I will not fabricate.
• AUM trajectory (the real KPI): seed $4M (Oct 2017) → ~$4.5B (post-ETC, 2024) → ~$10B (post-spot-ETF, 2024) → ~$11B (Apr 1, 2025) → >$15B (2026). A clean up-and-to-the-right line — but every point is a function of crypto prices on that date, so the trajectory flatters a rising market and will reverse in a drawdown.
• Implied revenue: >$15B AUM at a blended ~0.20–0.30% fee (low-fee BTC heavy, offset by higher-fee altcoin/tokenized/private products) ⇒ ~$30M–$45M annualized fee revenue. This is a gross-fee figure before fee waivers, rev-share with distribution, and opex — net is materially lower. Profitability is n/a — not disclosed; a 122–200-person firm on ~$30–45M gross fees is plausibly near or below breakeven on a GAAP basis, with the equity raises funding the gap. This is an estimate, not a disclosure — flagged.
• Balance-sheet flags: unknowable (private). The $70M Series C in Feb 2025 suggests they wanted runway / acquisition currency, not distress — but raising in a crypto up tape (early 2025) and now operating in a down tape (mid-2026) is the classic squeeze.

Lens 6 · "Earnings Calls" → Founder/CIO commentary trend (+private swap)

No earnings calls. Substitute: the public commentary cadence of Horsley and Hougan, who are unusually prolific (a deliberate brand strategy).

• Tone, early-mid 2026: structurally bullish-but-evolving. Hougan's headline calls: Bitcoin "could hit $6.5M in 20 years" (long-horizon bull); and a thesis pivot toward "revenue chains" — Hougan/Horsley arguing Hyperliquid and Solana lead a 'revenue chain' era (chains that generate real fees/revenue, not just store-of-value). This directly explains the BHYP/BSOL product push — the narrative and the product roadmap are aligned.
• Shift over time: from "Bitcoin as the institutional gateway" (2024, spot-ETF era) → "staking + yield + altcoins + tokenization as the next leg" (2025–2026). The recurring new phrases: revenue chains, staking yield, tokenized funds, onchain. What they've stopped leaning on: pure BTC-maximalism. The firm is explicitly diversifying its narrative away from a single asset — smart for a fee-mix standpoint, riskier on a beta standpoint.
• Read: management communicates like an asset-gatherer with a strong content engine. The risk is that a prolific bull voice in a −18.5%-MTD June (Lens 8) reads as talking-its-book to skeptical advisors.

Lens 7 · "Comps" → Cap table & secondary marks (+private swap)

Peer set = crypto asset managers / ETP issuers. Multiples are `` or n/a (private comps rarely disclose clean multiples — I will not fabricate one).

Note the apples-to-oranges: Bitwise's ">$15B" is total client assets across all wrappers; the BlackRock/Fidelity/Grayscale figures are single-fund spot-BTC AUM. On a like-for-like spot-BTC basis Bitwise (BITB ~$2.4B+) is a clear #4–5, not #3. The ">$15B total" ranking is real but flattering.

Cap table quality / IPO-proximity tell: the Series C syndicate is tier-1 crypto + institutional (Electric Capital lead; Khosla, General Catalyst, Haun, ParaFi, plus MIT IMC and MassMutual as institutional LPs). What's absent is the IPO-proximity signal: no crossover-fund entry (Fidelity/T. Rowe/Coatue) is reported on the cap table. By the private-watch readiness scale (1=seed … 5=S-1 filed), that absence places Bitwise around stage 3 ("late-stage"), not 4–5. Secondary marks: n/a. Context: 2026 private secondaries are trading at an average −35.7% discount to last round — a crypto name in a drawdown would likely mark below its undisclosed 2025 round.

Lens 8 · "Stock-Price Catalysts" → Funding & product/market catalysts (+private swap)

No stock. The events that move Bitwise's value (AUM, franchise, IPO-readiness) and the crypto tape it rides:

• Jan 11, 2024 — spot Bitcoin ETF approval + BITB launch. The franchise-defining event; AUM →$10B. The "seven-year overnight success."
• 2024 — ETC Group + Osprey acquisitions. Bought European ETP presence (→$4.5B AUM) and OBTC's ~$123M of assets (BITB → 5th-largest spot-BTC ETF).
• Feb 25, 2025 — $70M Series C.
• Oct 28, 2025 — BSOL (first US spot Solana staking ETF), ~$400M in 3 weeks.
• May 15, 2026 — BHYP (first US spot Hyperliquid ETF, in-house staking).
• Jun 1, 2026 — Bitwise Crypto Carry Fund (USCC) takeover from Superstate — entry into tokenized funds.
• The macro tape, 2026 (the dominant driver): BTC Jan −10.2%, Feb −14.9%, Mar +1.8%, Apr +11.9%, May −3.4%, June −18.5% MTD. ETF flows whipsawed — March net +$1.32B, April +$1.97B, then the June sell-off. What the pattern reveals: Bitwise's economics are a levered call on crypto AUM — it makes money on rising prices and rising flows, and is currently exposed to both reversing at once. The single most important fact in this dossier is the June drawdown.

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Phase C — Judge people & books

Lens 9 · Management

• Hunter Horsley (Co-founder / CEO). Track record: built Bitwise from one index fund (2017) to >$15B across 40+ products and the first US spot Solana/Hyperliquid ETFs — a genuine, quantified founder achievement. Background: product manager at Facebook/Instagram (video monetization), Wharton econ. Founder archetype — visionary product-led founder, not a professional asset-management lifer. Implication: strong on product velocity and narrative; the open question is operational/fiduciary rigor as a regulated-fund complex scales.
• Hong Kim (Co-founder / CTO). Built the early infra; leads engineering and onchain/staking tech. The staking vertical (Bitwise Onchain Solutions) is a CTO-led differentiator.
• Matt Hougan (CIO). The credibility anchor — ex-CEO of ETF.com and Inside ETFs, an ETF-industry insider before crypto. Rare and valuable: a TradFi-distribution native fronting a crypto product. Owns index methodology + research + advisor education.
• Teddy Fusaro (President) — named alongside Horsley/Hougan in the civil suit (Lens 10); operating leadership.
• Skin in the game: founders presumably hold meaningful equity (private, no insider-transactions.csv — empty ); exact ownership n/a — not disclosed.
• Capital allocation: disciplined and on-strategy — used M&A to buy distribution/assets (ETC Group, Osprey) and buy a new product category (Superstate/USCC tokenized fund) rather than overpaying for headcount. Raised at the top of a cycle (Feb 2025) — good timing. No evidence of value destruction.
• Red flags: the Mukamal civil suit (Lens 10) is the one named blemish; otherwise the team is well-regarded. The bigger soft risk is key-person concentration — Horsley + Hougan are the brand; the moat (Lens 3) is largely their credibility.

Lens 10 · Forensic Red Flags + Regulatory

Accounting-risk read (necessarily limited — private, no statements): the standard ETF-issuer forensic flags (revenue recognition, SBC, goodwill from the ETC Group/Superstate acquisitions, related-party fund/sponsor arrangements) cannot be examined — there are no financials to examine. financials.csv is empty. The one structural concern visible from outside: a private sponsor that also runs the staking vertical (Bitwise Onchain Solutions) that earns yield inside its own funds is a related-party arrangement worth scrutinizing if/when an S-1 discloses the economics — note for the IPO-readiness file, not an allegation.

Regulatory findings (required sub-section):

• SEC EDGAR (LR + AAER): total_sec_findings: 0. Bitwise Asset Management has no CIK (private), so no EDGAR enforcement search is possible; the product trusts file routine registration statements (S-1/485APOS/10-Q), not enforcement matters.
• Non-SEC enforcement (web search): No material FTC/DOJ/FDA/CFPB/CFTC enforcement action against Bitwise Asset Management was found.
• Private civil litigation: a ~$2M lawsuit by the Mukamal family named CEO Horsley, President Teddy Fusaro, and CIO Matt Hougan, alleging a "reckless and negligent pump-and-dump scheme" and failure to disclose liquidity / management-fee changes on a private fund. This is a private civil claim, not a regulator action, and the allegations are unproven — but it is the one named integrity flag and belongs in the position seed's risk list.
• ⚠️ NAMESAKE CONFUSION — do NOT conflate (high-value forensic catch): web searches surface a "$20M employee settlement," a "$115M fraud scheme," and guilty pleas by Irma Olguin Jr. and Jake Soberal. That is Bitwise Industries — the unrelated, now-collapsed Fresno tech-apprenticeship company — not Bitwise Asset Management. Any analysis that attributes the Fresno fraud to the crypto asset manager is wrong; this dossier explicitly separates them.
• 10-K Item 3 (Legal Proceedings): n/a — private, no 10-K exists (the SKILL's anti-fabrication rule — I will not invent one).
• Verdict: No SEC/regulatory enforcement against the asset manager (verified via SEC EDGAR EFTS LR/AAER and web search as of 2026-06-30); one unproven private civil suit; one critical namesake-confusion trap flagged. Books unverifiable — private, unaudited.

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Phase D — Project & stress-test

Lens 11 · "Forward Projection" → IPO-readiness & path-to-tradeable (+private swap)

No EPS to project. The +private substitute is the path to a tradeable security and a revenue trajectory.

• No private-watch.json entry exists for bitwise. IPO-readiness is web-grounded below. (Recommend, outside this wave: add a bitwise entry to private-watch.json with beat: crypto, stage: late-stage, ipo_readiness: 3 once Connor confirms — flagged, not done, per wave boundaries.)
• IPO-readiness — call it 3 (late-stage), trending toward 4:
• For: scaled, recognizable franchise; a public-comp environment that wants crypto issuers (Galaxy is public; Circle, Coinbase, Bullish, Gemini have tapped public/secondary markets); a deep, regulated product suite that reads like a pre-S-1 portfolio.
• Against: no crossover-fund (Fidelity/T. Rowe/Coatue) on the cap table — the classic IPO-proximity tell is absent; revenue is small (~$30–45M gross est.) and cyclical; mid-2026 is a crypto drawdown — the worst window to file. No S-1 has been filed by the operating company (the EDGAR S-1s are product trusts).
• Milestones that unlock an S-1: (1) AUM durably >$20–25B through a cycle; (2) demonstrated fee-revenue growth independent of price (mix-shift to altcoin/tokenized at higher fees); (3) a crossover round or pre-IPO secondary; (4) a recovered crypto tape. Estimated window: not imminent — 2027+ absent a sharp crypto recovery.
• Revenue base/bull/bear, FY2026:
• Base: AUM holds ~$15B avg × 0.22% blended ⇒ ~$33M gross fees.
• Bull: crypto recovers, AUM →$22B × 0.25% (mix-shift up) ⇒ ~$55M.
• Bear: drawdown deepens, AUM →$10B × 0.20% ⇒ ~$20M gross fees — and at ~140–200 staff, that is plausibly cash-burning, forcing reliance on the Series C runway.
• Brier forecast: not logged. Per --watchlist rules, skip forecast.ts create in the loop, and there is no clean binary (no EPS line, no dated IPO). The trackable proposition for a future pass: "Bitwise Asset Management files an S-1 by YYYY-MM-DD" — deferred.

Lens 12 · Bull vs Bear

Bull case. Bitwise is the purest, best-run independent bet on crypto becoming a permanent advisor-allocated asset class. It owns the specialist-trust position BlackRock can't (BlackRock is a generalist) and the product-velocity edge the generalists won't match — first to spot Solana staking, first to spot Hyperliquid, first into tokenized funds. As the four-year cycle gives way to a structural institutional-adoption regime, the long tail of altcoin/staking/tokenized products — the higher-fee end where Bitwise is the first mover — is exactly where incremental advisor dollars go. Management is credible (Hougan), founder-led, and allocates capital well. A crypto recovery re-rates AUM and fee revenue together, and an eventual IPO gives the franchise a public currency.

Bear case (2–3 permanent-impairment risks).

1. Revenue is a levered, redeemable call on crypto AUM into a falling tape. BTC is −18.5% MTD in June 2026; ETF flows whipsaw; ETF shares redeem daily with no lockups. A sustained drawdown shrinks AUM and triggers outflows and compresses the fee base simultaneously — a triple-hit a TradFi manager with sticky mandates never faces.
2. The fee-compression vise. Schwab cut core ETFs to 0.03%; the only reason crypto fees (0.20–0.34%) survive is that the majors haven't fully commoditized them — and IBIT at 0.25% being BlackRock's top moneymaker guarantees they will try. Every altcoin ETF (BSOL, competitors' SOL funds) is already launching at ~0.20% with fee waivers. Bitwise's higher-fee mix-shift (its core bull lever) is racing a commoditization wave.
3. It is a supplier to its own disruptors. Schwab ($12T) is entering crypto; Vanguard now distributes third-party crypto ETFs. A platform that distributes you today can launch a house-brand spot-BTC/SOL ETF tomorrow and out-distribute you on its own shelf. Bitwise has no distribution moat of its own.

Pre-mortem (18 months out, thesis broke): crypto stayed in a 2026–27 bear; BITB/BSOL bled AUM; BlackRock and Fidelity launched their own staked-SOL/altcoin ETFs and undercut on fee; Bitwise's gross fees fell toward $20M against a ~150-person cost base; the next raise was a down-round (in line with the −35.7% secondary discount regime ); the IPO window never opened.

Are multiples too high? n/a — no public multiple. But against a 2026 backdrop of crypto privates likely marking ~35% below last round, the undisclosed 2025 Series C mark is probably stale-high versus a fresh print today.

Contrarian view (what the market refuses to see): the consensus frames Bitwise as "the #3 crypto asset manager." The truer frame is "the #1 independent specialist in a category the platform giants are about to vertically integrate." Its real, durable value isn't the spot-BTC AUM (commoditizing) — it's the R&D-and-first-mover engine on the altcoin/tokenized frontier, which is precisely the kind of asset a Schwab/Fidelity/BlackRock acquires rather than builds. The most likely high-value exit may be M&A, not IPO — and that optionality is under-discussed.

Lens 13 · Devil's Advocate (short-seller)

Dismantling the bull:

• What structurally breaks the model: it is a fee-on-AUM business with zero revenue durability — daily-redeemable wrappers on the most volatile asset class on earth. In a bear, revenue, AUM, and flows fall together. There is no recurring-mandate floor.
• Revenue concentration: disproportionately spot Bitcoin (BITB) + the price of BTC. A BTC drawdown (happening now, −18.5% MTD) hits the largest, most price-sensitive product hardest. The altcoin diversification (BSOL/BHYP) is higher-beta, not lower — it diversifies the name of the risk, not the magnitude.
• Why the moat is weaker than bulls think: "trusted specialist brand" is a soft moat that evaporates the moment BlackRock/Fidelity decide altcoin ETFs are worth their attention. There is no switching cost, no network effect, no cost advantage. Bitwise's edge is being first and willing — a lead measured in months, not years.
• The most dangerous competitor bulls underestimate: Charles Schwab. $12T platform, just entered spot crypto, cut core ETF fees to 0.03%. Schwab can launch a house crypto ETF, distribute it on its own rails, and price it below Bitwise's marginal cost — funded by NII and order flow. Bitwise sells through Schwab today.
• Worst capital-allocation / governance items: the Mukamal pump-and-dump civil suit (unproven) and the related-party staking vertical earning yield inside its own funds — both are the kind of disclosure an S-1 would force into the open.
• What must hold for today's (undisclosed) valuation: crypto stays in a structural bull; altcoin fees don't compress to BTC-ETF levels; the majors stay slow on the long tail; Bitwise keeps shipping first. If AUM-driven revenue disappoints 20–30%, a ~$33M gross-fee base falls to ~$23–26M against a fixed ~150-person cost structure — straight into cash burn and a likely down-round.
• Single permanent-impairment scenario, and plausibility: a custodian failure/hack in the spot-ETF complex (Coinbase Custody-class event) that breaks advisor trust in crypto ETFs broadly — low probability, catastrophic if it hits. More plausibly: a prolonged crypto winter + majors commoditizing altcoin fees, which doesn't kill the company but permanently caps it as a sub-$50M-revenue niche acquisition target. Plausibility: moderate.

Lens 14 · Management Questions (ordered by information value)

1. What is your blended net fee rate (after waivers and distribution rev-share) across the >$15B, and how has it trended over the last 8 quarters? — the single number that determines whether the franchise is a real business or an AUM trophy.
2. At what AUM level is the company GAAP-profitable, and where are you against it today given the June crypto drawdown?
3. What share of revenue is tied to spot Bitcoin price specifically, and how do net flows behave in a >20% BTC drawdown — do advisors hold or redeem?
4. What is your honest plan for when BlackRock or Fidelity launches a staked-Solana / altcoin ETF and undercuts you on fee?
5. Is the more likely value-realization path an IPO or an acquisition — and what would have to be true for you to file an S-1?
6. Walk me through the related-party economics of Bitwise Onchain Solutions earning staking yield inside your own funds — how is that conflict governed?
7. What is the cash runway from the Series C at current burn, and under what scenario do you raise again — and would it be a down-round at today's secondary marks?
8. What is the current cap table by ownership, and why has no crossover fund (Fidelity/T. Rowe/Coatue) come in yet?
9. How concentrated is distribution across Schwab/Fidelity/Vanguard, and what happens to your shelf if one of them launches a house-brand competitor?
10. How durable is the higher-fee mix (BHYP 0.34%, USCC 0.75%) — or do those compress to 0.20% as competitors copy them?
11. What did the ETC Group and Superstate acquisitions actually cost, and what return are they earning on those dollars?
12. What is the status and exposure of the Mukamal litigation, and are there other undisclosed claims?
13. How dependent is the moat on you and Matt Hougan personally — what is the key-person succession plan?
14. What is your tokenized-fund roadmap beyond USCC, and do you believe tokenization is additive or cannibalistic to your ETF AUM?
15. If crypto entered a two-year winter starting now, what does the business look like in 24 months — and what would you cut?

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