Ideas For Bitcoin Bulls

Stonetoss Bitcoin comic

Pseudonymous cartoonist "Stonetoss" on Bitcoin volatility.

Taking Advantage Of FUD

In our previous post (Crypto: Look Out Below), we mentioned a Bitcoin-related long idea, Cleanspark (CLSK): 

Cleanspark sells software to manage energy microgrids, but the company also mines Bitcoin using, reportedly, 95% clean energy, which is notable, given Elon Musk's recent complaints about the amount of coal burned to mine Bitcoin. It might be worth keeping an eye on if you think crypto will bottom out soon.

We noted there that it was expensive to hedge with put options:

As of Tuesday's close, it was too expensive to hedge against a greater-than-20% decline over the next several months using optimal put options...

This and similar screen captures are via the Portfolio Armor iPhone app.

That's worth of further elaboration. First, let's look at the other Bitcoin-related name that popped up in our top ten on Wednesday. 

Two Bitcoin-Related Top Names On Wednesday

Cleanspark appeared among our top ten names again on Wednesday, along with another Bitcoin-related name, Microstrategy (MSTR). 

Screen capture via the Portfolio Armor website

Readers may recall that we wrote about MicroStrategy's CEO Michael Saylor in a previous post (How The Next Crash Happens). He's a huge Bitcoin evangelist, one who encouraged Elon Musk to put Bitcoin on Tesla's balance sheet. 

As it happened, Tesla (TSLA) announced it had added Bitcoin to its balance sheet in early February; since then, you know the story. 

Extremely Expensive To Hedge With Puts

Due in part to the fear, uncertainty, and doubt surrounding Bitcoin now, both MicroStrategy and Cleanspark are extremely expensive to hedge with puts. As of Wednesday's close, the smallest decline you could hedge MSTR against over the next several months with optimal puts was one greater than 31%. 

1 2
View single page >> |

Disclaimer: The Portfolio Armor system is a potentially useful tool but like all tools, it is not designed to replace the services of a licensed financial advisor or your own independent ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.