BITCOIN: The Crypto Expert
The floodgates are open; now try and find your private key or be chained forever
Is network size correlated to coin value?
You won’t find the chain. The chain finds you!
We bet against the Santa Coin and short anything Fried.
1. Why Do I Care Right Now?
Let me be your Crypto Expert today. Call me Michael Saylor, call me Samuel B.-Fried, call me Mickey Mouse.
Decentralized blockchain technologies with their cryptographies will likely find sound and widespread practical use sometime in the future. However, it is unclear how to value crypto coins used to incentivize mining and other work around these chains, products, or services. The usability or size of a network doesn’t have to be correlated to coin value.
Like any other debased fiat currency that isn’t backed by real assets, cryptocurrencies are nothing more than belief systems. People can trust fiat currencies because governments and central banks guarantee their use and value. However, cryptocurrencies do not have a central law-making authority; they are stuck with storytelling and human belief only. And we know how fast the human animal can pump and dump ideas or feel-good phantasies the minute they stop delivering on expectations. It could last considerably longer with religious movements, though.
It is hard enough for actual governments to keep people in check once a crisis has been broken loose. People love their bank runs once the music stops. Do not expect Nash Equilibria when it comes to people’s hard-earned savings.
The Bitcoin chart doesn’t look pretty, it hasn’t been going anywhere for a few months, and now we just got a catalyst for yet another leg lower. This can happen when invisible fictional assets collateralize translucent projects and dreams. Or when involved players are either anonymous or wearing cargo shorts, white socks, and birds-nest headgear, discussing tech with ex-presidents at dusk, secretly trading customer funds at dawn.
The longer this drama continues, the more crypto assets have to be sold due to immediate financing needs or an increasing lack of trust in the coin-based system. For now.
Don’t get me wrong, I don’t dislike going long Bitcoin at some point this decade, but now is not the right moment. Unless you think it is. And no, any of these calls are far from easy to make. Markets are unpredictable. However, we will be safe if we stick to sensible trade sizing and well-established MacroDoζer trade mechanics.
The next technical support is at USD 12-13K, which roughly translates into a BITO price range of 7-8.
2. Useful Background Information
Our preferred product on Bitcoin with liquid option chains and no direct Crypto Exchange risks is the Proshares Bitcoin Strategy ETF with the ticker BITO. Proshares does not directly invest in Bitcoin but in the two front-month Bitcoin futures (/BTC) on a 30-day rolling basis.
3. Trade Execution
We are selling a bearish risk-defined straddle at 8, with wings at 4 and 12, and a contract maturity on Dec16, 2022.
Break-evens are at 5.50 and 10.50.
3.1 Trade Entry - Nov 11, 2022
Total: 2.45 Credit.
4. Final Comments
Expect updates on BrainDoζers within 4-6 weeks. We use the exact heading, ending with (+/- xy%), and label the cover cartoon with a red Doζed stamp. That way, the performance will be easy to follow.
We are not sending BrainDoζer updates via email unless you specifically ask for it here. We want to keep the information flow light and to the point. You can still freely access all updates on MacroDoζer the moment they are released.
My name is Juri von Randow. You can find me on the top banner to the right. MacroDoζing, as if there was no tomorrow. (Email version only.)
Feel free to share. Sincerely.