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Shorting Bitcoin

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Re: Shorting Bitcoin

#241

Post by jschulenklopper »

keymone wrote: post #135

let's go over beliefs: > high proportion of all Bitcoins are owned by insiders same as any other asset in the world, think pareto distribution - vast majority is owned by few entities. so since this point applies to everything pretty much equally - it can be discarded. > Bitcoin is not usable as a currency because the transaction costs and latency are both too high. (Yes, I know about the Lightning network.) mentions…

> if bitcoin blows up the other direction, the author loses 100% of their investment (if they are smart) or unlimited amount of money (if they are stupid).

Well, he bought put options, so his max loss is the investment he made into that. He's smart.

Re: Shorting Bitcoin

#242

Post by wolfhumble »

midjji wrote: post #156
AmericanChopper wrote: post #114

Earlier quoted context omitted.

That’s a very bad thesis to trade options on. The author believes that BTC is overvalued, but if you look at their reasons for believing it’s overvalued, some of them could have applied to BTC at any point in time over the past several years, and the rest could have applied to BTC and any point in time since it’s creation. By buying puts on bitcoin (derivatives), they’re not only betting that they’re correct, but als…

Bitcoin, like tesla stock is better predicted by treating it as a religion than a rational investment. So how long are people going to believe a kid who said a god knocked her up to avoid getting stoned?

> So how long are people going to believe a kid who said a god knocked her up to avoid getting stoned?

What you say does not make much sense. When Jesus came to Nazareth as a grown man, this is what His neighbours said about Him:

“Isn’t this the carpenter’s son? Isn’t his mother’s name Mary, and aren’t his brothers James, Joseph, Simon and Judas?" (NIV Matthew 13:54).

And a few verses later: "And they took offense at him. But Jesus said to them, “A prophet is not without honor except in his own town and in his own home.”" (NIV Matthew 13:57)

So clearly, Mary – Jesus's mother – was not kept from being stoned because her neighbours believed Jesus was the Son of God, see Luke 1:26-38 for what Mary was foretold by the angel about her birth of Jesus as the Son of God.

Before Jesus was born, Joseph married Mary: "When Joseph woke up, he did what the angel of the Lord had commanded him and took Mary home as his wife" (NIV Luke 1:24).

Jesus became known as our Saviour because of His words, acts, death and resurrection, not because the neighbours thought He was so spectacular when He was born.

Re: Shorting Bitcoin

#243

Post by [deleted] »

breck wrote: post #43

I love this sort of thing. He’s making a bet, explains his reasoning, and does it in the open! That’s great. I disagree that there’s no tech here. IMO public ledgers that never sleep are far superior(thanks to the hard work of many people over the past decade), and their advantage over retail banking will only increase. My online banks keep getting worse, crypto keeps getting better. Think about this: banks are CLOSE…

[deleted]

Re: Shorting Bitcoin

#244

Post by thisisit »

lordnacho wrote: post #59

Derivatives guy here. Perfectly fine opinion, but two issues. Why now? This is a general investing issue. Trading costs money, holding a put costs money, so why will the market do what you think in this time frame? Why are the puts cheap? This could be substantiated with some numbers, esp implied volatility. Are they cheap vs history? I don't know, but the reasoning should show why you think so. Note I'm not looking…

I think there is lot of subjectivity in this trade.

The timing of the trade mostly author's gut feel that bitcoin will soon transition to a seller market as everyone who wants to buy bitcoin will already have one.

Puts being cheap is also a subjective measure. Author might be looking at past prices and making the bet. He isn't looking at greeks at all.

Re: Shorting Bitcoin

#246

Post by puranjay »

panarky wrote: post #91
lordnacho wrote: post #59

Derivatives guy here. Perfectly fine opinion, but two issues. Why now? This is a general investing issue. Trading costs money, holding a put costs money, so why will the market do what you think in this time frame? Why are the puts cheap? This could be substantiated with some numbers, esp implied volatility. Are they cheap vs history? I don't know, but the reasoning should show why you think so. Note I'm not looking…

Since he bought his puts on 6/26, BTC is up 9.5%, MSTR is up 9.9% and COIN is up 13.5%. He's already pretty deep underwater.

This is the "return to normal" pump before the crash.

Re: Shorting Bitcoin

#247

Post by puranjay »

codebolt wrote: post #194
femto113 wrote: post #85

Earlier quoted context omitted.

Except if you believe, as the author does, that the entire market is just scams and insider manipulation there is no meaning to be gleaned from any of the numbers. If it's all a sham it will blow up at some point, it's just a question of when, but that will almost certainly be precipitated by some unpredictable external event.

One major caveat; You're not shorting BTC/USD, you're shorting BTC/USDT. As long as Tether is managed by a shady, unregulated corporation with zero transparency or oversight, that has full freedom to create as much artificial liquidity as they see fit, that seems like a very bad bet.

Most people don't know this but Tether and Bitfinex have the same parent company, iFinex. Bitfinex is easily the largest manipulator of BTC price and their wallet holds nearly 1% of the BTC supply.

Together, they practically control the market.

Even Bitcoin maxis agree that Tether's collateral is very risky. It's a house of cards waiting to collapse.

Re: Shorting Bitcoin

#248

Post by 1experience »

This is how to lose money with shorting 101.

You should never base your shorts on solely rational points (long-term rational points, even worse) when going short on bubbly assets.

Things like "Bitcoin is not a viable payment method, it's centralized, possibly manipulated, fueled by the greater fool" is not a valid shorting motive unless you have a triggering event caused by your aforementioned rational point.

Re: Shorting Bitcoin

#250

Post by puranjay »

breck wrote: post #43

I love this sort of thing. He’s making a bet, explains his reasoning, and does it in the open! That’s great. I disagree that there’s no tech here. IMO public ledgers that never sleep are far superior(thanks to the hard work of many people over the past decade), and their advantage over retail banking will only increase. My online banks keep getting worse, crypto keeps getting better. Think about this: banks are CLOSE…

International transfers are a mess but domestic transfers in my country are open 24x7 and are instant with minimal or even no fees.

Payments is a solved problem technologically. It's only American banks that refuse to get with the times.

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