Ian Cooper’s Stock Pick of the Week

Chart of Day: How to Hedge Bitcoin 

“Take a look at the ProShares Bitcoin Strategy ETF (BITO),” we said just last week, adding that, “If you believe the value of BTC will push higher, you can invest in the Pro Shares Bitcoin Strategy ETF, which tracks the performance of spot Bitcoin.” 

At the time, Bitcoin traded at $59,826.10. BITO was at $28. 

Days later, Bitcoin would hit a high of nearly $69,000, which sent BITO to a high of $31.76.

 

Nowadays, with Bitcoin back to $66,053.80, BITO is now up to $30.43.  

From here, we strongly believe Bitcoin is headed to $80,000 – which could send BITO to higher highs. Not only on the fear of missing out (FOMO), but also ahead of the Bitcoin halving — where the BTC mining reward is cut in half to reduce the number of new coins entering the network. “If fewer Bitcoins are being made available, the price ought to rise, assuming demand remains constant or increases,” says. BitPay.com. 

While the rally has been fun, it’s never a bad idea to hedge for potential downside, which we can do with another ETF – the Pro Shares Short Bitcoin (BITI). This one follows the S&P CME Bitcoin Futures Index, with profitability computed daily (before fees and expenses) as the inverse (-1x) of the index’s daily performance. BITI has an expense ratio of 0.97%.

 

Ian Cooper is an experienced trader who uses a combination of technical, fundamental, and news analysis to help individual investors grow their wealth. Ian’s Premium Options Strategies

 

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.