Long Bitcoin/EUR ETN (From 29-Nov to 2-Feb)
Real-Time AmpGFX – comments on trades (Fri 2/2/2018 6:18 AM MT)
Bitcoin was going to be my long-term trade, but I decided that I shouldn’t be dogmatic and retain some discipline on acceptable losses. There has obviously been a lot of speculative money drawn in, and the price action has probably knocked a lot of confidence out of the market that may take some time to restore. I will consider buying again when I can see more positive technical patterns emerge. However, there is a risk that it blows off all the gains in the last year before it cleans out the recent enthusiasts.
The premise that bitcoin and ethereum can take on safe haven status remains valid. Their construct remains attractive in that sense.
Real-Time AmpGFX – sold Bitcoin to square (Fri 2/2/2018 5:05 AM MT)
I sold my holding in a bitcoin ETN, to square my position.
My pain point was the break of 8000, around the pre-thanksgiving levels which began the most recent surge late last year.
Comment to follow
Comment ( Thu 11/30/2017 11:28 AM MT)
A note on my bitcoin position, I mis-spoke earlier when I said my position was 1/10th of my standard FX position size. It is, in fact, 1/20th. I noted that given the volatility in bitcoin that I would call this a 1 unit trade. I have amended that to a half unit trade in my positions below.
Real-Time AmpGFX – bought Bitcoin (Wed 11/29/2017 3:02 AM MT)
Bought an Exchange Traded Note (ETN) designed to track the value of Bitcoin
https://xbtprovider.com/fact_sheet_dl/xbt_provider_factSheet_final_a4.pdf
It is valued in EUR. The price at purchase was EUR 452.13 per ETN (I purchased essentially at the opening of trade for this security that trades on the Stockholm Nasdaq Nordic. Underlying Bitcoin was around 10,600 USD per Bitcoin (XBT).
The amount purchased was one-tenth of our standard unit used in currency trading. Given the volatility in XBT, we will call this trade one unit in size.
Comment
It will not be run with stop losses or take profit orders, but treated more as a long-term investment.
I recently bought a US-based ETF that holds Bitcoin as part of my Superannuation fund, but decided I wanted a more meaningful stake, so I have added this ETN to our company’s trading account.
I see Bitcoin as potentially rising to become a significant part of investment portfolios, offering the characteristics of gold. It also appears likely to become the basis of more financial derivatives which may make it more useful as a vehicle for transactions and a range of financing activities. I see it as a disruptor of national currencies; like Uber is to Taxis or Amazon is to retailing. As such, there is a potential for a significant part of global wealth to end up invested in the leading and dominant cryptocurrency.
The volatility in Bitcoin at the moment is scary and attracting widespread dismissal as a bubble. But it alternatively may be the growth phase of a new and important asset. I see its price rising to the order of $100,000, or more, even $1,000,000 per bitcoin.
The reports I have read suggest that it is limited ultimately in supply to 21 million bitcoins. If $1 tn of global wealth were deployed in bitcoin it would be valued at $47,000. Global wealth might be $600 or $700 tn, and gold mined is supposedly around $7.5 tn. Bitcoin in my mind has the potential to take 1% or more of global wealth. I don’t have a firm concept of these numbers, but the magnitude suggests significant upside for bitcoin if it can become the mainstream cryptocurrency.
In this sense, I am not trying to trade Bitcoin. I just want a sizeable stake that if I were to lose the whole thing because I was wrong it will hurt but not wipe me out.
The size of this position will be significant enough, potentially, to matter to my performance results, reported on my website, and thus it will be included in my position report. Even though my intention is to hold it for a long time. I reserve the right to change my mind and dispose of this position at any time.
In most respects, I have largely confined AmpGFX trading to currencies, gold and some rates and bond futures. Markets that are highly relevant to the FX market. Bitcoin is in my mind likely to become like gold and be seen as a form of currency. In time, it could operate as a kind of currency, in which deposits are held, it is borrowed and lent, and it is the underlying denomination of bonds and a range of derivatives.
Positions
Short half unit NZD/USD at 0.6901; s/l 0.7018; t/p 0/6685
Short half unit AUD/USD at 0.7585; s/l 7663; t/p 0.7488
Long one unit of XBT derivative at $10,600