Ditch Your Bitcoin for Bigger Profits ๐ ๐ฅ
Helping EVERYONE to make better crypto investment decisions.
๐ 1)ย Predictably, the crypto market has become quiet during these summer weeks.
๐ 2)ย This has caused trading volumes and volatility to fall markedly.
๐ 3)ย Investors might be well advised to replace their Bitcoin spot with Bitcoin options, notably upside calls, as lower volatility has made option prices cheaper.
๐ 4)ย It is not a surprise to us, nor to our readers, that volatility has now dropped to the lowest level for US stocks โ as the VIX Volatility Index has declined to just 13.2% - as well as for Bitcoin, where realized volatility is trading at only 27% (see chart).
๐ 5)ย This allows locking in the year-to-date gains for Bitcoin, while the call option exposure allows participating in any upside rally.
๐ 6)ย Are you worried about the seasonal sell-off in September? With long calls, you do not need to worry.
๐ 7)ย The freed-up capital could be deposited into interest-yielding products, such as Matrixdockโs STBT, which currently yields +4.7% - a similar yield as Ethereum staking protocols are offering (5.2%).
๐ 8)ย Investors could liquidate their Bitcoin spot, which has rallied +77%, and buy an at-the-money call monthly for around 3% of the notional value.
๐ 9)ย This โBitcoin replacement strategyโ would guarantee continuous exposure to the upside opportunity of Bitcoin through buying a Bitcoin call every month for 3% notional exposure (5 [Aug-Dec] *3% = 15%) while locking in this yearโs gains of +77% (minus 15% for the calls), which leads to a net gain of ~62% even if Bitcoin prices retrace from here and each call loses money.
๐ 10) STBT would generate +1.96% (5/12*4.7%). So net, this strategy locks in +64% gains for BTC while still having 100% of the upside for the rest of the year.
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