Pholesolus

Buy BTCUSD For Free

Long
Hey Guys! Sorry it's been a little while since I've posted, but I'm back today with an interesting idea that I think many of you may be interested in.

Over the last couple of days, a small Chinese bitcoin mining company called Bit Digital has exploded in value as the market has begun to realize the potential of the company's bitcoin mining operations. In the last few hours, however, J Capital, a short seller, published a report alleging that the company is basically a total scam, has no meaningful operations, and is worth nothing. In addition, they claim that the company's board cannot reach it's ceo for comment, because his whereabouts are not currently known. Publicly wanted for questioning, some have speculated that the Chinese authorities have detained him. This short report, combined with the fall in price of bitcoin over the weekend, sent the stock tumbling down -25% today. Now, while the stock is down a ton, it might be the exact opportunity we need to create a beautiful trade.

Ok, so here's the plan: Long Riot, and Short BTBT . Theoretically, BTBT is worth nothing, but the company will still likely retain some of its trading correlation with BTCUSD . Hence, you can't really just short it outright without controlling your risk. At the same time, you might want to be a dip buyer in BTC , but it's tough to know exactly when the bottom will be and you, like me, likely don't want to risk an investment going to zero.

Hence, our trade. When BTC goes up, RIOT should go up more than BTBT , because BTBT has the fraud and short seller claims as a massive headwind / overhang, though some will still use it as a BTC proxy. When BTC goes down, BTBT should lose more value than RIOT, because the company is alleged to have no meaningful operations, and the only thing holding the stock price up is the hope for higher BTC prices, again, in its use as a BTC proxy. This spread should essentially create a synthetic long bet on BTCUSD , while removing a ton of the risk involved in buying it at these prices.

LMK if you decide to try the trade, and feel free to ask questions in the comments below if you don't understand the idea.

Cheers!
Comment: hope that if you took this trade you are still in haha

Comments

Damn! That's a crazy idea, but might be genius. Not sure I have the stomach for that, but I'm going to debate it and maybe give a shot with a small amount.
+2 Reply
Pholesolus Beyondo00
@Beyondo00, cheers & GL mate! haha
+1 Reply
Looks like that capital is rolling out of BTBT and into MARA. I hold positions in BTBT, MARA and RIOT, and MARA is vastly outperforming all, with BTBT sucking wind, and RIOT still not prepullback levels of RIOT:BTCUSD. I believe part of it is due to BTBT holders also already in RIOT, so swapping a chinese firm for another one is the better diversified play. Second reason RIOT isn't responding according to the market is because of the unfortunate event in the US Capitol that bears the same name as RIOT. I'm not saying the market makes sense, but after seeing how Musk's tweet to use Signal boosted SIGL to crazy levels. There are plenty of smooth brains out there with Robinhood accounts. I'm one of them :). Oh yeah, buy TSLA calls.
+1 Reply
Pholesolus mskntrdr
@mskntrdr, what a rollercoaster of a comment
+1 Reply
mskntrdr Pholesolus
@Pholesolus, looks like BTBT just popped. Silly me for reducing my stake and too bad there are no options available in my platform.
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Wow!!!
Nice...
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Currently at $25.20. I kinda like your idea and yeah topside target around $42 looks good from here.
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Interesting take. Worth a shot. Betting on black and red, just hope it doesn't land on double 00. How to we feel about management capital investments? (mgti) another small bitcoin mining company
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Genius, I took one look at the BTBT website and decided that I wanted no part in it at all. I did day trade it a couple times between $9-$11, one of those you wished you held onto haha. Sometimes scams pump the hardest.
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Amazing long/short strategy. Thank you for sharing this!
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