Long Bitcoin vs. Short Ethereum 💥💥💥
Helping EVERYONE to make better crypto investment decisions.
Many have been asking, so for the next 30 days, for new yearly subscribers of our substack updates, we will send a copy of the book ‘Crypto Titans: How trillions were made and billions lost in the cryptocurrency markets” to their postal address (no extra shipping and handling fees).
👇 1) This is still our preferred trade.
Here is why:
👇 2) Overall, the macroeconomic environment is bullish for crypto. The Fed has been on hold since July this year, and historically, this has led to significant rallies in crypto. Despite US inflation having a correction higher for the last four months, Bitcoin is holding up well.
👇 3) Of course, as everybody knows, the potential approval of a BlackRock-listed Bitcoin ETF could see billions of dollars of inflows. This will have a massive impact on BITCOIN. We have some estimates about this and will release our analysis within the next day or two.
👇 4) Geopolitically, we can also argue that economic sanctions and military conflicts could see an inflow in the crypto asset class. Here, the crypto of choice is Tether’s USDT as a) the USD is strong and b) it has zero-crypto volatility. Tether’s market cap is rising, so there is evidence that crypto ‘demand’ is increasing.
👇 5) US bond yields continue to rise again, primarily reflecting the ‘term premium’ – the residual part that cannot easily be explained by inflation compensation or short-term expectations. While this could be interpreted as bearish for risk assets, it should be bullish for BITCOIN as it reflects the massive fiscal spending (Ukraine/Israel/Student Loans, etc.)
👇 6) Total US Debt is now at $33.6trn, rising by $58bn in one day – imagine how many teachers you can pay with this money…Bitcoin offers an alternative to fiscal madness – even the crypto critics will have a tough time arguing with that – I am open to criticism in the comments section – throw the tomatoes.
👇 7) This is all bullish for Bitcoin, which is why Bitcoin is up +70% YtD. Chart-technically, Bitcoin appears to target 30,000 after the triangle breakout formation. Of course, Bitcoin must hold onto this mini-breakout, but we are looking for another leg higher.
👇 8) Meanwhile, Ethereum targets 1,250 as Ether is fighting with 1,550 support again. Even when the rumor of a BlackRock ETF circulated on Monday, Ether hardly rallied. The price action tells volumes.
👇 9) Ethereum is still up a respectable +32% YTD but massively underperforming Bitcoin, especially as Ethereum is seen as a higher beta asset.
👇 10) In previous posts, we have explained why Ethereum is doing so poorly, and we still have the same view. This week's price action encourages us to hedge long Bitcoin positions with short positions in Ethereum.
👇 11) Crypto traders and everybody else can use these quieter days to get some reading done and learn about the crypto industry's history. This will help in understanding where the industry will go. We suggest the book "Crypto Titans: How trillions were made and billions lost in the cryptocurrency markets"
