Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[ChartBuddy]

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[d_eddie]

[/center]

Dear President,
we respectfully request that you make good on the other promise too.
You know which one.
Thank you for your consideration.
Sincerely,

[Torque]

Thanks for your reply, Torque.

It seems that each time Michael Saylor announces his latest purchase of bitcoin, the price dumps. This is conterintuitive, but one explanation is that after the announcements, the bears feel safe to short since there's going to be no huge MSTR buying pressure for a few days.

I think the real answer to this question is buried at the end of this article:

https://www.cnbc.com/2025/01/21/david-einhorn-says-we-have-reached-the-fartcoin-stage-of-the-market-cycle.html

Shorting leveraged bitcoin ETFs

Greenlight took advantage of the craziness around crypto during the fourth quarter by betting against some popular ETFs linked indirectly to bitcoin.

The two funds the firm focused on were the T-Rex 2X Long MSTR Daily Target ETF (MSTU) and the Defiance Daily Target 2X Long MSTR ETF (MSTX). Those funds use derivatives to try to achieve two-times the daily returns of MicroStrategy,

a software company that has turned itself into a bitcoin treasury vehicle in recent years.

The funds have at times struggled to achieve that goal due to MicroStrategy’s volatility and little supply of the derivatives most easily used to get the leveraged returns.

The letter said Greenlight took short positions against those funds during the quarter, partially offset by owning MicroStrategy stock in an arbitrage trade that was a “material winner.”

TL/DR - So shorting MSTR Long 2X ETFs while owing MSTR stock, an arbitrage play.

Do these 2x ETFs track bitcoin or something else? Do Greenlight add on top of their short after MSTR buys, or is that an automatic effect of the makeup of the ETFs? I honestly don't understand the mechanism hinted at by the article.

I believe the two ETFs track the MSTR stock index, but at 2X leveraged. It sounds like Greenlight was shorting them, partially hedged by owning MSTR stock directly as well. Someone correct me if I'm wrong, but I'm assuming was the arbitrage trade was taking advantage of the volatility swings in price gap between the two positions.

The process of maintaining and rebalancing a leveraged ETF fund sounds complicated and quite the headache, with transaction costs that can eat into the investor's returns.

Here's an article that explains it in more detail:

https://www.investopedia.com/articles/exchangetradedfunds/07/leveraged-etf.asp

[d_eddie]

TL/DR - So shorting MSTR Long 2X ETFs while owing MSTR stock, an arbitrage play.

Do these 2x ETFs track bitcoin or something else? Do Greenlight add on top of their short after MSTR buys, or is that an automatic effect of the makeup of the ETFs? I honestly don't understand the mechanism hinted at by the article.

I believe the two ETFs track the MSTR stock index, but at 2X leveraged. It sounds like Greenlight was shorting them, partially hedged by owning MSTR stock directly as well. Someone correct me if I'm wrong, but I'm assuming was the arbitrage trade was taking advantage of the volatility swings in price gap between the two positions.

The process of maintaining and rebalancing a leveraged ETF fund sounds complicated and quite the headache, with transaction costs that can eat into the investor's returns.

Here's an article that explains it in more detail:

https://www.investopedia.com/articles/exchangetradedfunds/07/leveraged-etf.asp

Aha now I see, thank you. I haven't read the investopedia link yet, but I've read that the (btc-, not MSTR-based) ETF managers have their own trouble to keep it aligned with the underlying. It is done daily if I'm not mistaken, and at the end of the trading day. So I guess there's an opportunity for arbitrage if one is quick enough to exploit the (probably small) daily discrepancies in price.

If it's only that, it sounds like much too much work for the money. Just long btc ffs. 

[ChartBuddy]

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[philipma1957]

[/center]

Dear President,
we respectfully request that you make good on the other promise too.
You know which one.
Thank you for your consideration.
Sincerely,

Hmm he freed Ross. waiting for more news on BSR


https://abcnews.go.com/Politics/trump-authorizes-ice-target-schools-churches/story?id=117954409


"Trump authorizes ICE to target schools and churches"

Still waiting for his first big Ice raid and deportation.

Along with BSR

[xzy887]

MARA CEO says they are focusing on bringing the Strategic Bitcoin Reserve to all 50 states and the Federal government.

IT’S HAPPENING!!

https://x.com/Vivek4real_/status/1881894115111231613?t=5iFcB0L2lNtrLkL5b10RNA&s=19

[ChartBuddy]

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[philipma1957]

yeah the mara CEO must be tripping on how much he will earn if we go bsr

[OgNasty]

MARA CEO says they are focusing on bringing the Strategic Bitcoin Reserve to all 50 states and the Federal government.

IT’S HAPPENING!!

https://x.com/Vivek4real_/status/1881894115111231613?t=5iFcB0L2lNtrLkL5b10RNA&s=19

So much bullish news hitting the markets. I’m starting to have friends seriously ask me for advice on how to invest into Bitcoin. I worry about telling people to open crypto accounts to get started and usually tell them to buy IBIT or FBTC. I have started telling people if that isn’t exciting enough to look at MSTR. People seem more comfortable betting on stocks.

[philipma1957]

MARA CEO says they are focusing on bringing the Strategic Bitcoin Reserve to all 50 states and the Federal government.

IT’S HAPPENING!!

https://x.com/Vivek4real_/status/1881894115111231613?t=5iFcB0L2lNtrLkL5b10RNA&s=19

So much bullish news hitting the markets. I’m starting to have friends seriously ask me for advice on how to invest into Bitcoin. I worry about telling people to open crypto accounts to get started and usually tell them to buy IBIT or FBTC. I have started telling people if that isn’t exciting enough to look at MSTR. People seem more comfortable betting on stocks.
[/quote

I SUSPECT we get over 250k which is a bit scary.

[OgNasty]

Our guy is free. Ross is officially on the outside and probably eating a burger as we speak. I’m so glad that the Presidential vote went the way it did. It is going to be so nice having an administration that wants to help us win instead of trying to jail us for breaking free of their financial slavery. I’m so happy for Ross and his family tonight.

[ChartBuddy]

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[ChartBuddy]

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[jojo69]

[xzy887]

MARA CEO says they are focusing on bringing the Strategic Bitcoin Reserve to all 50 states and the Federal government.
Hope this information will be useful to your friends. Always tell them to invest with caution.

IT’S HAPPENING!!

https://x.com/Vivek4real_/status/1881894115111231613?t=5iFcB0L2lNtrLkL5b10RNA&s=19

So much bullish news hitting the markets. I’m starting to have friends seriously ask me for advice on how to invest into Bitcoin.

The easiest and best way to invest in Bitcoin is to buy low and sell high. No one can predict when the high will be. So you have to wait until Bitcoin goes up.
I hope this method will be useful to your friends and you will tell them to invest with great caution.

[ChartBuddy]

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[El duderino_]

Something about keeping his word

[ChartBuddy]

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[ChartBuddy]

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