So I'm brand spanking new at crypto but in light of recent events I've decided to finally invest. I've acquired a few shares of different types of coin, one being DOGE. Idk why but I've had this feeling that something is going to happen with the events surrounding this meme coin. Looking at predictions people don't expect DOGE to surpass 5$ in 5 to 10 years. But is that actually the case here? I can't help but to think people's predictions for bitcoin weren't very worthwhile for a long time and now its bouncing around under 100k. I don't know much about crypto but something pulled me in to this. Let's talk about it.
Saturday, December 7, 2024
Why Trump Must End Capital Gains Tax On Bitcoin
https://www.nasdaq.com/articles/why-trump-must-end-capital-gains-tax-bitcoin
So I've just heard of this wacky new thing called the bit coin.
Fresh off the back of KULR profits, drunk on my (limited and relative) success, I've unblocked the crayon goop from my nose to begin to sniff out my next big money making losing opportunity.
My main method of stock analysis
Apparently there's this thing that's all the rage now called bidcoin.
If, like me, you hadn't heard of this before, basically it's an imaginary electronic currency.
Kinda like the more famous Hawk coin from the Hawk Tuah girl that I see has been hitting the news in a big way lately it looks like this new challenger to the scene, Billcoin, might be ready for the next big run up.
At the very least I'm willing to gamble on another surge in price over the short term. Whether it's new US fiscal policy to enforce bitcoin payments at border crossings (oh shit this better not give David Sacks any ideas), or something else funny going on over in America, I think anything tied to some funny imaginary digital money is likely to be volatile as heck. (just wait until I realize it's all funny imaginary digital money)
basically I just want it to do this again
Note: This is not an analysis or or endorsement of birdcoin's long term prospects or it's value as an asset, I'm not really qualified to give that kind of a perspective. But, I have a good feeling in my jiminy crickets that we might see a jump before around the middle of next Jan - that's basically it, that's the gamble here.
Also, full disclosure I'm too regarded and stuck in my ways to figure out a crypto wallet, I'm old and I'm tired and figuring out Tiger Brokers reward scheme rotted away the parts of my brain responsible for learning new skills.
So I won't be telling you how to set up a wallet or anything like that.
I decided to just look at bitcoin adjacent stocks already available to me on my broker platform. Minimum effort.
Oh, before we get into it, just in case you may be fooled into thinking I know what I'm talking about with the recent kulr success, here's my NVDA chart showing I did indeed, sell it below $100.
Any time you feel inclined to think I even have a rudimentary grasp of what I'm doing and aren't just falling upwards in a silly money market, I urge you to come back and view this graph to settle those doubts.
Bitcoin adjacent companies
I don't want to expose my portfolio to bitcoin directly, but I do want to profit off any short term appreciation, at least to make (or lose) a quick buck by playing some options and stocks on a company that invests heavily on bircoin.
Apparently, it's a viable business model to just take out loans, buy bitcoin, wait for the bifcoin to appreciate, borrow against the increased value of the company, buy more bitcoin, rinse and repeat.
It's literally an infinite money hack. An infinite mana system in Magic the Gathering cards where you do it a couple of times to show your opponent it's possible, that there's nothing they can do to stop you, and then you just 'win the game'
Well, that's my guess as to how they're doing it. I haven't bought bitzcoin but I have played a bit of Magic the Gathering so it makes sense to me conceptually at least. If that's not how they're doing it then I need to make an appointment with the bank.
In all honesty, I don't know if it's more simple or complex than that and I don't care to learn, but let's have a look at how some other people make money with it.
(MSTR) Microstrategy
Michael Saylor is like the John Constantine of techno-theologican business deals. A company that was founded when Saylor sacrificed his left nut to not 1 but 3 different pantheons of ancient gods, getting them to fight out over who would rightfully claim his future parabolic success as a shrine to their strength, and therefore driving up the price of bitcoin even further in unnaturally impossible ways.
I imagine it looked something like this
- So how do they do it?
Well, funnily enough microstrategy were originally a start up focused on data mining and business intelligence, way back in 1989. As they grew and acquired clients over the 90s, 2000s and further, they also expanded into mobile app development, some other stuff- blah blah, okay, this is the boring stuff. I'm just paraphrasing wikipedia here.
There was a cheeky little bit of fraud lawsuit that was settled with the SEC with no admission of wrongdoing in 200s when their share price went from $7 up to $333 in a year and then fell drastically, so, make of that what you will I guess. Bullish
The cool stuff with bitcoin happened starting around 2020 where Microstrategy invested a bunch of their cash reserves into bitcoin as a "treasury reserve asset". To put it simply (like, really really simply) it's basically the infinite money glitch I theorized above but using their cash reserves instead of loans, primarily.
But yeah, it's kinda reached it's meme stock status just because they keep buying a bunch of bitcoins, value go brrrr.
Other bitcoin-adjacent companies
(MARA) Mara - Marathon digital holdings are an "american digital asset" company. So, basically they mine bitcoin and other crypto currencies. They've bought bitcoin, and run mining facilities, however they have had their share of controversies, notably being involved with a patent troll company, and then more recently being investigated for noise and health complaints by Time magazine from allegations of nearby residents to one of their facilities.
Good enough for me, bullish - featured in Time.
I'm going to be taking positions around the above stocks, but here are some other bitcoin adjacent companies that you might want to look into if you're thinking of getting into this space. Not financial advice, you know the drill.
(BITF) Bitfarms limited - mining of crypto coins over Canada, the US, Paraguay and Argentina. They also run electrical engineering and repair services in-house so that's pretty neat.
(HUT) hut 8 - self mined bitcoin reserves. I couldn't really find much about this group to set them apart, but on their website I thought this was funny
(CLSK) Cleanspark - bitcoin miner in the Americas that focuses on data centers run on low carbon power.
- Bitcoin ETFS
For a bit of diversified exposure in the scene, instead of having to try and pick which one of these 'digital asset' companies are going to succeed in their money hack gambles-
(BTC) Smart Bitcoin ETF - our very own NZX bitcoin ETF, nice!
(IBIT) iShares Bitcoun Trust ETF - a NASDAQ listed Bitcoing ETF
I mean, that's all well and good, but for my particular tastes, I was gonna need more leverage
These bilcoin appreciation funds are already leveraged to all fuck against the price of bitcoin, and as much as this new craze was beginning to hit, I knew, I had to go deeper. I needed to amp up the steaks, I was going to find a 2x fund with the juiciest, somewhat riskiest option contract I could find, roast it and smoke it.
- Leveraged bitcoin funds
Now we're talking. This is the good shit. It makes you squeak "woo!" after you hit the buy button and throw your kiwisaver funds that you got out through financial hardship on some of the riskiest, dirtiest funds known to Warren Buffet's therapist. Perfect for my personal risk tolerance.
- MSTX - Defiance 2x Daily Long MSTR
- MSTU - T-Rex 2x Daily Long MSTR (note MSTU is currently set to split 1 to 10 on 16/12/24)
- Or, if you want to get really spicy, there is MSTZ, the T-Rex 2X Inverse daily, a short fund for microstrategy.
Whatever your flavour of degenerate gambling, the markets have got you covered, no fancy techno wallet or whatever the kids are calling it, required.
* My position
Now, I wanted to have a bit of fun with this, but I'm not going overboard. I am NOT dumping my kiwisaver that I got out through financial hardship on this, more just a bit of a gamble on this risky thesis.
My position on this short term bitcoin play is-
1x MSTX 100 call - microstrategy 2x daily leveraged
1x MARA 25 call - it's like temu microstrategy
100 x shares MSTY - hoping for a large run up before the div ex date, due to general mstr volatility, and then I'll sell before div ex
* The exit strategy-
I'm not planning to try and hold these for a big payout, I'm just hoping some news event and volatility spike sends the price up so I can collect a bit of profit. I'll likely set my take-profit levels somewhere between 30-50% for each of these positions and look to close them off when the opportunity presents itself.
Either way, should be an interesting play! Greenbean out! (to go look into this exciting new opportunity of Hawk coin, my mate over in Dubai swears it's gonna have another run up soon!!1)
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