5 Powerful Strategies To Play The Bitcoin Trade

Discover how to capitalize on Bitcoin's volatility and potential

Hey, MFG!

On Monday, August 7th, 2024, the financial world was rocked by a sudden and unexpected surge in the Japanese yen.

As investors and traders, flocked to the yen, seeking safety amidst global economic uncertainties, the ripple effects were felt across various asset classes, including the cryptocurrency market.

Bitcoin (BTC), often recognized as a digital alternative to traditional safe havens like gold, wasn't immune to the volatility triggered by this currency shock.

The yen's surge not only highlighted the interconnectedness of global markets, but also emphasized the importance of having a well-rounded and diversified strategy when trading and investing in BTC.

The sharp movements in BTC’s price during and after the yen's increase serve as a reminder that understanding how to navigate different market conditions is critical for any investor or trader.

In light of such unpredictable events, how can you best position yourself to capitalize on BTC’s potential while managing risk?

Here are five powerful strategies to play the BTC trade, whether you're looking to buy and hold, day or swing trade, write futures contracts, trade with leverage, or generate passive income.

Don’t take the time and research that goes into finding these various ways to play the BTC trade for granted.

-GP a.k.a Fullauto11

The Peters Report - Stock & Crypto Trader’s Resource

Looking for a group of likeminded people to trade with? Text alerts and the MFGDiscord. Text GP 1-936-661-7786 or email GP fullauto11@gmail.com to join.

5 Powerful Strategies To Play The Bitcoin Trade

Bitcoin (BTC) has evolved from a niche digital asset to a mainstream investment, captivating the attention of investors and traders worldwide.

With its volatility and potential for high returns, there are multiple ways to participate in the Bitcoin market, depending on your risk tolerance and investment strategy.

Whether you're looking to buy and hold, generate passive income, or actively trade, here are five different ways to play the Bitcoin trade.

1. Buy and Hold Directly on the Blockchain ($BTCUSD on Coinbase)

One of the simplest and most direct ways to invest in Bitcoin (BTC) is to buy and hold it directly on the blockchain. Using an exchange like Coinbase, you can purchase BTC with U.S. dollars through $BTCUSD.

This method gives you full ownership of the cryptocurrency, allowing you to store it in a digital wallet of your choice. By holding BTC, you're betting on its long-term potential to appreciate in value.

This strategy, often referred to as "HODLing," is ideal for those who believe in the long-term growth of Bitcoin and are willing to weather its short-term volatility.

The key advantage here is direct exposure to Bitcoin's price movements. You control your BTC and can move it off the exchange to a secure wallet, reducing the risk of exchange-related issues.

It's important to realize that BTC is a very volatile asset and remember that the value of your investment can fluctuate significantly, and you should be prepared for both the ups and downs of the market.

2. Leveraged Bitcoin ETFs (BITX)

For more aggressive traders looking to amplify their returns, leveraged Bitcoin ETFs like BITX offer a compelling option. These funds are designed to deliver multiples of Bitcoin's daily performance—typically 2x or 3x—through the use of financial derivatives and debt.

Leveraged ETFs like BITX allow you to take a larger position in BTC with a smaller amount of capital also while collecting a dividend.

For example, if BTC rises by 5% in a day, a 2x leveraged ETF would aim to return 10%. You must be aware, this leverage also works in the opposite direction, meaning losses are magnified as well.

These funds are best suited for short-term trading rather than long-term investing, as the compounding effect of daily leverage can lead to performance that diverges from the underlying asset over time.

Leveraged ETFs can be powerful tools for experienced traders who are confident in their market timing, but come with increased risks and should be used with caution.

BITX also just recently announced a new monthly dividend. See the BITX distribution schedule above. You can purchase BITX on most trading platforms, E-trade, Fidelity, Charles Schwab, Robinhood, and Interactive Brokers.

3. Options Income Funds (BITO & YBIT)

If you're looking for a way to earn passive income from Bitcoin, options income funds like BITO and YBIT could be an attractive option.

These funds generate monthly income by employing strategies such as writing covered calls and selling puts on Bitcoin futures. By selling options, these funds earn premiums, which are then distributed to investors as income.

This strategy can provide a steady stream of passive income, making it appealing for those who want to benefit from BTC’s volatility without the need to actively trade; however, it's important to note that while these strategies can reduce volatility and provide regular income, they also limit the upside potential.

If BTC’s price skyrockets, the returns from an options income fund might be lower than holding BTC directly.

Additionally, there are risks associated with the underlying options strategies, and these funds are not immune to losses if the market moves against them.

BITO and YBIT pay monthly dividends. Below are the monthly distributions for BITO and YBIT.

ProShares Bitcoin Strategy ETF (BITO):

YieldMax™ Bitcoin Option Income Strategy ETF (YBIT):

4. Bitcoin in a Retirement or Brokerage Account (GBTC & Other Spot Bitcoin ETFs)

For those who prefer to invest in Bitcoin within a traditional financial framework, investing through a retirement or brokerage account is a viable option.

Products like the Grayscale Bitcoin Trust (GBTC) or other newly approved spot Bitcoin ETFs allow investors to gain exposure to Bitcoin without directly holding the cryptocurrency.

These investment vehicles are available through 401(k)s, standard brokerage accounts and can be held in tax-advantaged accounts like IRAs, making them convenient for long-term investors.

GBTC, for instance, trades like a stock and represents ownership in Bitcoin, though it may trade at a premium or discount to its underlying assets.

Spot BTC ETFs, which are becoming more common, track the price of BTC and can be bought and sold like any other ETF.

These options are ideal for investors who want to incorporate BTC into their retirement portfolio or who prefer the simplicity of holding Bitcoin-related assets within their existing financial accounts.

5. Trading Bitcoin Futures on Coinbase

Finally, for those who are comfortable with more advanced trading strategies, Bitcoin futures contracts offer another way to play the Bitcoin trade.

Available through Coinbase's Derivatives Exchange on their advanced trading platform, futures contracts allow traders to speculate on the future price of Bitcoin.

With futures, you don't need to own Bitcoin directly.

Instead, you enter into a contract to buy or sell BTC at a predetermined price on a specific date in the future. Futures contracts can be leveraged, meaning you can control a large amount of Bitcoin with a smaller capital outlay.

Futures trading is often used by speculators looking to profit from short-term price movements or by investors looking to hedge their existing BTC positions; however, this method is complex and comes with significant risks, including the potential for large losses if the market moves against your position.

Futures trading is best suited for experienced traders who understand the mechanics of the derivatives market and are prepared for the high risk involved.

GP’s Wrap Up

There are multiple ways to participate in the BTC trade, each with its own set of benefits and risks. Whether you're a long-term investor looking to buy and hold, a trader seeking leveraged gains, or someone interested in generating passive income, there's a strategy that can fit your goals.

My favorite Bitcoin plays are BITO, BITX, and GBTC. I also like to write futures contracts on Coinbase.

As with any investment, it's important to do your research, understand the risks, and choose the approach that aligns with your financial objectives and risk tolerance.

Ready to dive into the world of Bitcoin (BTC)? Whether you're considering buying directly on Coinbase, exploring leveraged ETFs, or earning passive income through options, now is the time to take the next step.

Start your BTC journey today on Coinbase and sign up for The Peter’s Report newsletter to stay updated on the latest Bitcoin market movement, trading strategies, market trends, and investment opportunities.

Equip yourself with the knowledge and tools to make informed decisions and maximize your potential in the cryptocurrency market, today!

“All thoughts of poverty or lack must be eradicated from the mind.” - Wallace Wattles, The Science of Getting Rich

Always remember, whatever you think about comes about, whatever you focus on grows. - GP

Looking for a group of likeminded people to trade with? Text alerts and the MFGDiscord. Text GP 1-936-661-7786 or email GP fullauto11@gmail.com to join.