I woke up this morning to find bitcoin trading at $18,775. That's over $1K (+6%) since the stock market closed yesterday, over $4K (+30%) since last weekend and up over $11K (+150%) since Thanksgiving. Bitcoin is up about 2,000% since it started getting widespread recognition as a "bubble" about one year ago. It remains a special situation, a phenomenon beyond simply an impressive, extended trend.
Although there over 1300 iterations of cryptocurrencies, our focus has been on bitcoin and so far its only tradable ETF: GBTC. We stumbled into bitcoin and GBTC a little late, but not too late not to be sitting on significant gains. Our current long position from October 31st is up over 200%. That kind of gain is a rarity even among our option trades. Speaking of which, a new bitcoin inspired special situation trade, the OSTK March $60 call, is up 60%...in just two days.
Is it too late in the game? In brutal honesty, I haven't a clue. Just an observation: What goes up continues to go up...until it doesn't. My suggestion is to dip your toes in, one at a time, so long as this cryptocurrency phenomenon persists. We have three positions (see charts below) with stops on all. Worst case, your toes get stung by jellyfish should all of the craziness come tumbling down in one fell swoop. Absent that, the stops should get us out without too much damage. Best case? We're seeing it every day.
Come on in, the water's fine.
TABLES & CHARTS