Tag: bitcoin

Ride the Crypto Dip with this Bitcoin ETF

Posted on by Matt Thalman

In late June, the ProShares Short Bitcoin Strategy ETF (BITI) began trading. BITI is the first inverse or ‘short’ Bitcoin exchange-traded fund in the US. The purpose of this ETF is to give investors a way to profit if the price of Bitcoin falls.

The fund didn’t seem to be well received the first day it was available to investors, but in just its first nine days of trading, it grew its assets enough to make it the second-largest Bitcoin-focused ETF listed in the US. The largest is ProShares Bitcoin Strategy ETF (BITO), which has over $680 million in assets while BITI has just around $59 million in assets under management.

There is really nothing super special about BITI other than the fact that it is the first time investors can short Bitcoin with an exchange-traded product specifically designed to do just that task. However, the timing of BITI being released on the market is interesting, to say the least.

First, Bitcoin just wrapped up its worst month in the 12 years that it has been traded on exchanges. Yes, you read that correctly. June 2022 was the worst month Bitcoin has had in 12 years. Bitcoin lost 38% of its value in June. Let that sink in.

Since Bitcoin peaked in November of 2021 at $69,000, the cryptocurrency is now down around 71%. (This is not the worst decline Bitcoin has had; in 2018 during the last ‘crypto winter’ Bitcoin lost more than 80% of its value.

Furthermore, a recent report about Bank of America’s internal customer data shows that the number of active crypto users has dropped by 50%, from 1 million in November 2021, to below 500,000 in May 2022.

The price of Bitcoin and other major cryptocurrencies has been crushed lately, but so has the number of active users. These two numbers are likely interconnected, but also show that the public's interest in Bitcoin, and perhaps even other cryptocurrencies, is waning.

And lastly, the SEC just denied the application to convert the Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF. Many believe that if and when the SEC allows a spot Bitcoin ETF, new investors will flood the markets since many believe the structure of a spot ETF is much better than a futures-based ETF.

This leads us back to the idea that the timing for the Bitcoin Short ETF was interesting, or just even straight bad. Now granted, ProShares filed with the Securities and Exchange Commission to offer this Bitcoin short ETF back in February 2022, but that doesn’t help the fact that it didn’t hit the market until after a lot of bad news and low prices have hit Bitcoin and the rest of the cryptocurrency industry.

If ProShares had come to market with the Bitcoin short ETF just a few months or even weeks prior, investors could have caught a wave of bad industry-wide news, like the collapse of a stablecoin and a number of crypto firms falling into financial troubles, needing cash infusions or announcing layoffs.

With Bitcoin down 71% from its peak, or 38% in just June alone, investors have to be asking themselves if the world's largest cryptocurrency has fallen too fast and/or too far.

How much more room does Bitcoin have to go? From $20k a coin to $10k? Maybe even $5k? Or have we seen the bottom at $17k?

It is hard to say where Bitcoin goes from here, especially in the short term. But it isn’t very easy to get short or go long an investment after it has already made a big move in that direction, such as getting short after it's already down 38% in a month and 71% since November.

With that all said, beggars can’t be choosers. We didn’t have a short Bitcoin ETF before, and now we do. So, while the timing may not have been ideal, it is good to know that some investors are already taking advantage of this opportunity.

But, more importantly for me, I like knowing that I now have a viable option to short Bitcoin if and/or when I may find the opportunity to do so.

Matt Thalman
INO.com Contributor
Follow me on Twitter @mthalman5513

Disclosure: This contributor did not hold a position in any investment mentioned above at the time this blog post was published. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Stocks And Bitcoin Holding Up

Posted on by Wayne Burritt

In last week’s installment, I told you about how we finally got a solid weekly up bar across every major stock index. In fact, I went into detail about the 6% plus bullish action for the Dow, the S&P 500, the Nasdaq, and even the broad market Russell 2000.

In addition, across the board, they all reversed multi-week down bars. And the Dow’s reversal was the most longed-for of all four indexes: It snapped an eight-week collection of weekly down bars.

All in all, the action was a welcome sigh of relief. So, what happened after that? Did we get much follow-through last week?

While we didn’t get another weekly up bar in all four indexes, all four did manage to book higher lows than the prior week.

Is that a good thing? You bet. It means that despite selling, prices held up. It also means that sellers didn’t have to resort to continually lower lows to attract buyers: Buyers were finally willing to pay up for shares. And I don’t have to tell you that change in sentiment was a huge improvement over the constant bearish price action over the last two months.

Are we out of the woods yet? Not by a long shot. In fact, as I mentioned last week, the recent positive action in all four stock markets could just be a temporary bull market rally.

It might also develop into what’s called a “dead cat bounce.” Here’s what I mean: Continue reading "Stocks And Bitcoin Holding Up" →

Is Bitcoin In Trouble After $3K Drop

Posted on by Matt Thalman

The Thanksgiving Holiday of 2017 was right around the time when most casual retail investors first began to hear about Bitcoin and cryptocurrencies. What ensued is why we all still talk about Bitcoin and what most believe permanently put Bitcoin on the map.

The price moves from slightly before Thanksgiving 2017 until the end of the year in 2017, where what Wall Street dreams are made of. Bitcoin went from $5,000 a coin to $20,000 a coin in just a few weeks. Early Bitcoin adopters were made millionaires in only a few weeks.

After a stellar 2017, Bitcoin had a rough 2018 when the price fell more than 80%, from above the $20,000 mark to down around $4,000. Even after the recent $3,000 drop Bitcoin has experienced, the crypto is still doing well for 2019. But, is the latest drop a signal of what’s to come, or a buying opportunity?

The Bitcoin bulls will tell you that Bitcoin has a history of big rebounds after big drops. While I fully agree with these statements, the problem is that no one knows when the big drop is over. Furthermore, most of the past declines came after the coin was simply overvalued, or a big catalyst had and gone. The recent drop followed a move from the Chinese Government increased its cracked down on the cryptocurrency industry. Continue reading "Is Bitcoin In Trouble After $3K Drop" →

Bitcoin And Cryptos Tank After Futures Trading Begins

Posted on by Matt Thalman

During the last week of September, the major cryptocurrencies got crushed. Bitcoin fell more than 20% from September 21st through September 26th and then slightly rebounded on the 27th by a little less than 2%. A 20% drop for the most well-known cryptocurrency is not uncommon these days, as it fell that much back in July. However, that doesn’t make it an easy pill to swallow when it happens.

But while Bitcoin fell 10% on September 24th, it's closet rivals, Ethereum, Ripple, Litecoin, and bitcoin cash fell even more, somewhere between 15% and 20% respectively. The likely cause was the lack of interest from institutional investors after the highly anticipated Bakkt crypto platform began trading its “physically” settled bitcoin futures contracts.

The Bakkt platform was announced more than a year ago and had partnerships with Microsoft and Starbucks and was being touted as a way for institutional investors to get involved with cryptocurrencies. The platform allows futures trading of crypto’s but settles the order with physical coins, not cash like other crypto futures platforms currently offer. The thinking was that because the futures contracts had to be settled with actual coins, this would increase the demand for the different crypto’s being traded through the futures contracts.

However, during the first hour, the platform was live, only five contracts were traded, and even after ten hours, only 28 contracts had traded hands. Many industry experts, both who follow the crypto markets and general futures contracts actually have come out and stated this sort of activity is normal for the first few days of a new commodity being offered through regulated futures contracts. They claim some brokers aren’t ready to clear it, while others want to wait and see how things go, while others may not even have the tickers populated on their risk systems. Continue reading "Bitcoin And Cryptos Tank After Futures Trading Begins" →

Bitcoin Dropped To The Target

Posted on by Aibek Burabayev

Many years ago, when I was fifteen, I was inspired to become a professional trader after I had read a magazine story about a so-called “whale, the large market player. He was moving the markets with large orders sent to his broker out of his luxury hotel room. Markets were panicking, and politicians were trying to soothe the public telling them “true” stories. But the truth is that the impulse of the price was generated first in the “whale’s” mind and then it reached the market through the skillful hands of his broker, no other reason, except his will. The concept behind his action is a real mystery, known solely by himself. He could use any kind of analysis to be successful. The remaining is just the “noise.”

We are not “whales,” and I am not fifteen anymore, but we can find market irregularities to turn it into a profit. Let politicians talk, media buzz and profit run.

The bitcoin structure has been developing prophetically accurate as per the plan, that I shared with you a month ago. The leading coin has dropped hard from what looked to be an unbreakable area at $10,000 to hit the most anticipated target of $7,800. The actual low was just a few dollars below it. Again, the majority of you have made the correct choice based on the chart structure I highlighted for you. Hopefully, our vision gets sharper over time.

This collapse extended the damage of the crypto to 43% from the top of $13,764 established in June. The media have naturally started the “noise,” but we were prepared for this move two months ago, and we are not going to buy their “truth” as they usually sell extremes of either doomsday or a tulip mania. None of this is going to happen soon. Some “whales” just pushed down the market reckoning old trading wisdom – “if they don’t buy then I sell.” That’s it. This is what I was telling you at the opening of this post. Continue reading "Bitcoin Dropped To The Target" →