Bitcoin surged past $89,000 after Trump’s presidential election victory, driven by expectations of crypto-friendly policies. While we secured profits by closing positions before the announcement, we missed part of the subsequent rally. This reinforces the importance of flexibility in our strategies and highlights that markets can still surprise after major events.
Key News Highlights
1. Trump and Bitcoin: Trump’s re-election pushed Bitcoin up over 20%, fueled by hopes of a more supportive environment.
2. New Tax Hikes in Europe: Italy and Denmark announced significant crypto taxincreases, potentially impacting investors.
3. CZ’s Return: Binance co-founder CZ reappeared after resolving legal issues, predicting an optimistic 2025 for Bitcoin.
Chart Analysis and Strategies
The chart shows implied volatility (IV) higher than realized volatility (RV) at 30 days, supporting options selling strategies. A covered call strategy (buying BTC futures and selling short-term calls) is well-suited for this high-volatility environment. Another option is Coincall’s Simple Earn program, offering an APR of 24.60% to 35.40% while waiting for the best strategy.
VRP Charts
Outlook
The FED has shown signs of uncertainty, and Trump’s relationship with Powell could increase market volatility. If tensions arise, both the SPX and BTC, which are correlated, could react negatively. However, if conditions stabilize, we might see new highs for both the SPX and BTC by year-end. Given Trump’s unpredictability and potential sudden market moves, covered call strategies provide flexibility and the ability to add positions on dips.
Educational Note: VRP and Options Selling
A positive VRP indicates that IV is higher than RV, suggesting that options are overpriced and it is a favorable time to sell. This presents opportunities for negative gamma strategies, always with proper risk management.
Conclusion
Although we missed part of the recent rally, our strategy was profitable. Now, we focus on flexible strategies and leveraging volatility cautiously while waiting for new market opportunities.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Every investment involves risk.
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