Financial Insights That Matter
Bitcoin has been surging all year in 2024 but this week investors have seen “digital gold” vault above the monumental level of $100,000 . President-elect Donald Trump has presented crypto-friendly expectations, and he also has revealed political changes at the SEC that further fueled the rally, pushing the digital coin to up 140% in 2024. I want to book profits and hedge out potential downside risk if investors take a bitcoin breather over the holidays. The first bitcoin ETF launched in early January of this year, the iShares Bitcoin Trust (IBIT) , and other bitcoin funds that subsequently launched have attracted tens of billions of dollars of inflows throughout the year. IBIT is currently the largest in AUM with roughly $50 billion in assets. IBIT YTD mountain iShares Bitcoin Trust, YTD Since the November 5 elections results, IBIT has jumped up another 43%. Bitcoin is now ranked as the seventh most valuable global asset, surpassing the likes of Tesla and Meta in market valuation. That last sentence alone should even inspire some ‘HODLERs’ to implement a hedge, right? The new all-time high daily mantra in all assets classes is just another reason to consider booking profits and spending some money on an insurance policy. Furthermore, the risk-on correlation bitcoin has adopted to the Nasdaq 100 is a divergence from the initial characteristic of bitcoin which was to serve as a safe-haven and non-correlated asset: The Trade (Buying a Put Spread) Bought the $56 1/17/2025 IBIT Put for $4.40 Sold the $50 1/17/2025 IBIT Put for $1.85 Costing $2.55 or $255 per one put spread This is a hedge (with a defined cost) in the event bitcoin cools off as big ETF rebalances (that have to sell some exposure) overwhelm buyers short-term. In the event bitcoin runs up to $150k, this put spread will expire worthless, but the bitcoin exposure you own will still participate in that meteoric appreciation. DISCLOSURES: (Long BTC and this spread.) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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