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Shorting Bitcoin

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Re: Shorting Bitcoin

#71

Post by arcticbull »

rys wrote: post #69
vmception wrote: post #58

Someone that was predicted to own 5% (1mm) of all Bitcoins just died in Costa Rica I doubt they had a survivorship and secession plan for their bitcoins and I doubt Bitcoins become less scarce Shorting Microstrategy and Coinbase via puts are good ideas though. Microstrategy isnt overleveraged yet but its easy for them to be. Coinbase is just a share dump, thats the entire purpose of direct listings. This has nothing…

I was unsure and looked it up, so in case it helps someone else: the person that died in Costa Rica is Mircea Popescu.

Yes, and our friend Pomp left this delightful message on Twitter to mark his passing.

> Mircea Popescu, a Bitcoin OG, has passed away. He likely owned quite a bit of bitcoin. We may never know how much or if they are lost forever, but reminds me Satoshi said: "Lost coins only make everyone else's coins worth slightly more. Think of it as a donation to everyone."

Disgusting. [Edit] To be clear I'm reacting negatively to his choice of framing Micrea's passing in terms of his own enrichment, not quibbling with the mechanics. I've nothing against the idea that supply going down would benefit the community, just the way Pomp chose to address Micrea's passing. I suspect Pomp realized the optics himself as he has since deleted the tweet.

Re: Shorting Bitcoin

#72

Post by rantwasp »

paulpauper wrote: post #2

so this guy is buying puts on some bitcoin funds. Such a method would have gotten you killed more often than not . nothing in this post suggests he has anything of an edge or a good strategy.

here is an idea: if you strongly believe in this put all (or a significant chunk) of your money where your mouth is.

this guy has more money that he ever needs and now he’s seeking attention. this is the guy that quit from being a VP at Amazon out of principle (after he got rich)

all the doom and gloom around bitcoin and all the bad PR I’ve seem lately has a purpose, but it’s not what you think it is.

Re: Shorting Bitcoin

#73

Post by jakelazaroff »

factorialboy wrote: post #49
G3rn0ti wrote: post #44

Many traders still predict Bitcoin to be over 100k by the end of the year. December could align with the bubble peak due to Bitcoin‘s investment cycle triggered by the halving events. That could wreck his short position but if he’s lucky, it will burst earlier.

Halvenings are overrated. Bitcoin historically peaks 1yr after US elections and then finds a bottom and floats there for 3.5 yrs.

Where by “historically” you mean twice?

Re: Shorting Bitcoin

#74

Post by arcticbull »

tempestn wrote: post #23

I've sold Tether for both USD and CAD without any issue or significant delay. What are the difficulties the author is referencing? (Asking genuinely, not arguing.)

The question is about redemptions with Tether Inc, not trading USDT for USD to other traders. Tether should be redeemable for dollars by redemption at Tether Inc, but of course it's not, since they only have 3% of the dollars required to fulfill those redemptions.

Re: Shorting Bitcoin

#75

Post by Kranar »

Bootvis wrote: post #24
hgibbs wrote: post #10

Earlier quoted context omitted.

That's not right either, your downside for selling puts is limited by the strike (worst case is you pay K for a stock worth 0). Short call positions are the ones with unlimited downside (worse case is that you get K but have to cover the cost of arbitrarily high priced underlying).

Never mind, misread

Suppose you sell 1 put for 1 dollar with a strike of 100 dollars. The worst case scenario is that the asset decreases in price to be worth 0 dollars. The buyer of the put then exercises their option to sell the asset to you for 100 dollars, hence in total you lost 99 dollars.

As a general matter, the most you can lose when selling a put is the strike price - premium.

Re: Shorting Bitcoin

#76

Post by colordrops »

xvector wrote: post #65
jonny_eh wrote: post #54

Earlier quoted context omitted.

> Cryptocurrency is a beautiful technology On the surface, ya, but the proof-of-waste at its centre should be reason enough to consider the technology more harmful than not.

Thankfully most cryptos are moving to proof-of-stake.

Is proof-of-stake a proven technology yet though? Has it been shown to function without loopholes or exploits?

Re: Shorting Bitcoin

#77

Post by kortilla »

Bootvis wrote: post #24
hgibbs wrote: post #10

Earlier quoted context omitted.

That's not right either, your downside for selling puts is limited by the strike (worst case is you pay K for a stock worth 0). Short call positions are the ones with unlimited downside (worse case is that you get K but have to cover the cost of arbitrarily high priced underlying).

Never mind, misread

You’re confusing selling (writing) options, which come with being on the receiving end of the exercise as an obligation.

Re: Shorting Bitcoin

#78

Post by wsc981 »

So I will probably soon buy more Bitcoin as I believe the price will in the long run go up.

Tether (USDT) is a huge liability that could cause a temporary crash. But at the same time you see some regulation changing that e.g. allows banks to be custodians for crypto-currencies. In my opinion this is huge. It means that eventually institutional investors can buy Bitcoin and other cryptos without having to worry about storage, keys, etc... Banks can handle the technical stuff.

I have very little trust in the fiat system of the Eurozone and I'd bet there are investors that feel the same. Investors that will look into ways to spread the risk by adding different asset classes to their portfolios. Cryptos, especially Bitcoin, seems to be a very nice asset class to have in the long run.

Another reason why I think Bitcoin is here to stay is that Bitcoin enables countries to get around US imposed sanctions. Iran is using Bitcoin for this purpose and I am sure other countries do so as well.

Bitcoin as an asset class also offers a few nice features that one cannot find in other asset classes and I believe these features are responsible for most of Bitcoins inherent value:

- You can manage the coin completely by yourself (which can also be a risk of course - if you lose it, it's your full responsibility)

- The value of Bitcoin is not negatively affected by money printing (quite the other way around I'd wager).

- It's a bit easier to hide crypto assets from tax agencies, this might become an especially valuable property if Central Bank Digital Currencies become a thing. For example if citizens are required to keep an account at the central bank and the central bank can at all times see all your CBDCs and impose sanctions on your CBDCs if you're not deemed a good citizen.

- It's very simple to take with you on travel (e.g. by memorising wallet keys or using a hardware wallet like a Ledger Nano) unlike e.g. gold or fiat money (often some limit is imposed).

- It's easy and cheap to transfer (no banks or other middlemen involved).

- On a country level: can help bypass US sanctions.

So I am still a long-term believer in Bitcoin, even though I do believe that USDT could cause a crypto-market crash at some point. I also believe US government agencies will only investigate USDT if they feel the value of Bitcoin is too high (which currently isn't true after the most recent crash) as a way to temporarily control the price of the crypto-currency.

P.S.: I feel the authors' arguments 6 (climate) and 7 (greed) are not valid arguments for shorting Bitcoin. To me these seem mostly emotional arguments and I wouldn't want to make financial decisions based on emotions.

Re: Shorting Bitcoin

#79

Post by surfingdino »

He's betting on prices going down at the end of the current 4-year Bitcoin cycle, which they historically have done. This is just trying to guess when it'll happen.

Betting against Coinbase, an exchange, is a bit foolish as exchanges make money every time there is a trade, up or down. Their income is unaffected by market crashes, may even go up.

That detailed dig into the past of MicroStrategy is interesting... but I don't know how it applies to today. It has a whiff of a personal grudge and the comment about laser eyeballs reminds me of people complaining about the "Beta" label and the pastel colours of the early Web 2.0 websites.

Don't know why this blog post is important, tbh. But it shows that the crypto craze is in full swing when technologists start writing publicly about their investments.

Re: Shorting Bitcoin

#80

Post by arcticbull »

peter422 wrote: post #40
vlovich123 wrote: post #33

Earlier quoted context omitted.

The multiples that Tesla trades at arguably are on the assumption that they’ll crack self-driving first combined with their dominance in absorbing a good chunk of the green credits that they resell to other companies. The former feels sufficiently far out that the multiple is irrational. The latter will start disappearing as competitors roll out their own EVs and government subsidies start disappearing.

Tesla is the absolute world leader in battery manufacturing. A lot of people are betting on that as well. Tesla has a lot of things going for it if you project what we are going to need in the future. I’m not saying it is a good/bad investment but their entire car business could fade away and they could still be doing mega-business in other “green” business lines.

I don't believe Tesla manufactures their own batteries at this point, electing to source them from other manufacturers like Panasonic. They, I believe, intend to start making their own at some point in the future.
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