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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
Trading 4220 down 58% in a few weeks.
Going to zero?
Personally think the drop is institutions selling to raise cash but that does it go back up if they don't reenter? I think they do. We will see.
Right now I think you need to think of Bitcoin as a $0 call option with a price of $4420. While that may sound obvious/stupid I don't think you buy 4k because you think its going to 5k. You buy 4k because it's either going to $0 or pick your number!
I think the essence of the argument is who is a better safe haven, Gold or Bitcoin?
The answer (in my opinion) is neither. Safe Haven is cash..as @SMCJB said it right.
However, as opposed to Gold dumping which I believe is institutional selling, the entire crypto market is made out of algorithmic market makers and sophisticated IA that detects leveraged buying and dumps it instantly to get rid of the small players. I have seen this "Recycle and rinse" cycle since Bitcoin was at the early hundreds.
This is just my opinion based on price observation and reading about the MMs in the crypto space.
Thanks,
Matt Z
Optimus Futures
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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
Yeah the CME and ICE Bitcoin Options have been a real disappointment.
Some crazy stuff happened last night. On the lows the curve was in backwardation* rather than the contango it's always in. Probably due to a large order in the backs but interesting none the less.
* On CME Mar/Apr has a low of -20 vs 25 settle, Apr/May 0 vs 40, May/Jun -50 vs 25, Mar/May 0 vs 65, Mar/Jun -50 vs 90
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
While not as pronounced as in the overnight situation both CME settled their curves very flat with at least one month in backwardation. This is a big change from just a few weeks ago where the first 4-5 spreads were all in 75-100/contango and an even bigger change than 5-6 weeks ago where the front spreads where all higher than 100.
seems like during these tragic times, both Gold and Bitcoin are increasing in value. I believe there is a strong correlation between these two as they can be both considered safe-haven investments.
Anyone thinking of buying Greyscale Bitcoin Trust (GBTC) as a substitute for real Bitcoin should take note of the slippage. Greyscale charges a 2% annual fee and sells at a premium to the Bitcoin that it actually holds.
Over a 2 year time span 3/22/18 to 2/12/21 GBTC yielded -36.1% less than Bitcoin.
Over a 1 year time span 9/4/19 to 2/12/21 GBTC yielded -17.1% less than Bitcoin.
Over a 100 day time span 9/22/20 to 2/12/21 GBTC yielded -3.6% less than Bitcoin.
Making the same time span comparison for Gold (Kitco spot) and iShares Gold Trust iAU
Over a 2 year time span 3/22/18 to 2/12/21 iAU yielded -0.3% less than Gold.
Over a 1 year time span 9/4/19 to 2/12/21 iAU yielded -0.7% less than Gold.
Over a 100 day time span 9/22/20 to 2/12/21 iAU yielded -0.8% less than Gold.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
I gather the premium it trades at can fluctuate wildly as well. Still it's one of the few ways to buy Bitcoin in a standard brokerage account. Although the first Canadian/North American ETF was approved last week.
The last time I looked into Bitcoin, it seemed like cashing out was one of the biggest challenges if you were using it to store substantial amounts of value. Have there been any new developments to make that easier? The last real news I had followed was the collapse of Quadrigacx which spooked me from looking into this any further.
