BITCOIN: The Crypto Expert (+23%)
Being chained for twenty days is more than enough.
Executive Summary
Coin values from nirvana.
No-move is a good move when volatility contracts.
If there were a 23%-coin, we would sell it.
1. Recap Situation
We had our crypto expert Mike over to elaborate on coins & more. He confirmed our beliefs in the widespread use of blockchain technology at some point in our lifetimes. He warned us about coin values, though. They seem arbitrarily derived from nirvana, where he just came from.
Check out the original BrainDoζer below.
BITCOIN: The Crypto Expert
- Analyzing network size correlation to coin value.
- Uncertain direction due to speculative and belief-driven dynamics.
- Selling bearish risk-defined straddle on BITO ETF.
- Trade entry executed with a focus on technical analysis.
2. Why Now?
Twenty days in, and we already feel exhausted from all the crypto-craze. Even though our probabilities are fixed, and we enjoy taming beasts, we have to de-risk and do not want to roll the trade into January.
Volatility has contracted. Hence we are profitable at that point, even though Bitcoin has not moved that much in our anticipated direction. We could have given the trade more time at entry with wider break-evens. But what do we care now? Not that much, tbh.
We prefer our second Winter-Blows trade in the crypto miner MARA, which mirrors the current crypto chaos much better than the sluggish old Bitcoin. We should also avoid more than one active trade per industry.
Goodbye, old man.
3. Trade Execution
3.1 Trade Entry - Nov 11, 2022
Total: 2.45 Credit.
3.2 Trade Exit - Nov 28, 2022
Total: 2.09 Debit.
The absolute return of this trade is
2.45 - 2.09 = 0.36
The capital used was 1.55, resulting in a return on capital of
0.36 / 1.55 = 23.2%