Likes ReceivedBitcoin (Part 2), Asset Attributes & Crypto-Stock Investment
I. $2x Bitcoin Strategy ETF(BITX.US) Bitcoin's Asset Attributes and Correlation Analysis with Traditional Assets
1. Correlation Analysis Between Bitcoin and Traditional Assets:
1) Bitcoin shows no significant correlation with geopolitical risks or crude oil prices.
2) The correlation between Bitcoin and gold prices is not obvious. Although positive correlation periods have increased since 2020, no inherent positive linkage is evident.
3) Since 2020, Bitcoin has exhibited a relatively clear positive correlation with the MSCI Emerging Markets Index.
4) Bitcoin and the Nasdaq Index have shown some positive correlation since 2010. Post-2020, this turned into a strong positive correlation, reflecting Bitcoin's tech-innovation attributes.
From my observation, when U.S. stocks fall, BTC often follows suit in the short term. However, gradually, some funds flow into BTC, which ironically helps diversify risks in investment portfolios.
2. Bitcoin as a Tech-Innovation Risk Asset:
1) Bitcoin's price is highly volatile but delivers significant long-term returns.
2) Its cyclical bull/bear markets show no clear link to geopolitical risks.
3) Bitcoin lacks stable correlation with crude oil prices and doesn’t participate in global economic production.
4) Its relationship with gold remains ambiguous due to differences in market participants, funding sources, and perceptions.
3. Challenges for Bitcoin to Become "Digital Gold":
1) Bitcoin’s concentrated holdings contrast with gold’s dispersed reserve asset nature.
2) It faces potential tech risks like forks and quantum attacks.
3) High energy consumption in mining and hash-rate volatility pose risks.
4. BTC Asset Classes and Investment Considerations
1) Spot: Purchasable via platforms like Obex, CoinGlass.
2) Spot ETFs: See article (Bitcoin ETFs: Investment Value V = 10^(k*lg(t)-b)?). In January 2024, the SEC approved 11 spot Bitcoin ETFs: BITB (0 fee), ARKB (0 fee), FBTC (Fidelity’s reputable offering), EZBC (2.9% fee), BTCW, HODL, BTCO, BRRR, IBIT, DEFI, BCHG, plus the older GBTC (Grayscale Bitcoin Trust, 1.5% fee).
3) Futures ETFs: Southern Bitcoin (03066.HK), which invests in Bitcoin and Ethereum futures on CME. Also, 2x leveraged products: BITX, BITU (long), and SBIT (short).
4) Stocks:
① Exchanges: Coinbase (2x leveraged as CONL) follows the exchange-stock logic—active BTC trading boosts platform profits, often mirroring BTC’s price.
② Tier-1 crypto stocks: MARA (large cap, improving mining efficiency), CLSK (low-cost mining), MSTR (holds substantial BTC; track deviation via WGMI/BTC).
③ Tier-2 crypto stocks like Iris Energy IREN, CIFR, WULF, BITF, BTDR, CORZ, CAN (Canaan Tech).
Generally, when BTC rises, Coinbase and Tier-1 stocks lead; during consolidation, Tier-2 stocks catch up.
Crypto stocks often correct over 50%, making position control critical. Technical tools like Fibonacci levels for support/resistance and pyramid strategies for scaling in/out are recommended.
Crypto stocks are harder to invest in than spot/futures due to added U.S. market influences, requiring swing trading skills.
5. Risk Warnings:
Blockchain R&D may underperform.
Regulatory uncertainty could impact Bitcoin.
Web3.0 business models may face delays.
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