May 25: Negative Rates Eating the World (but not Crypto)
Like Chinese ADRs in the US, it's a sea of red for crypto with Bitcoin down more than 5% in the past 48 hours as it fails to hold above 9k & 8.8k where stops got triggered. No news or catalyst but the lack of bulls to follow through was evident through the volume, and perhaps over this long weekend that the usual buyers haven't been able to pile onto their longs.
Strategy? I'll stick to my game plan, sell BTC on rallies at $9k and $9.4k. The reason why I think we are likely to see a small bounce here than further breaking through towards 8k is simply because risk assets is trading much firmer - just look at HK equities trading today, the fact that even HK equities can close higher amidst China voting for it's National Security Law, just comes to show much risk wants to trade higher (pain trade).
After selling BTC into USD stable, one can also start to look at earning high interest rates on USD stables (i.e. between 6.9% to 18% on Matrixport's USD FI product). You can also opt for a redeemable option and call your deposit earlier (so you won't have to wait till the end of maturity). With U.S. 10 year yields trading 70 bps, it's just inconceivable not to get some exposure in USD yield here in cryptoland. In terms of volatility, I don't suggest selling here as 1-month ATM vol has just gotten below 75%, I see more value in selling vol when it's 80% or higher. Gd luck & speak to me if you want to discuss any trade ideas or structures.
The risk of BTC heading to X, Y and Z is likely lower than A, B, C. I think the pain trade is higher too with shorts piling onto the recent break down. My view is to short on rallies at 9k and 9.4k..
USD stable coin high interest rates on the new mobile app... after selling your BTC higher with vol suppressed, could be a good way to earn USD interest rates as negative rates eat the world...