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After The Bloodbath, It’s Time to Go Shopping

Today I bought Bitcoin futures on the Bitmex exchange (the largest Bitcoin futures exchange in the world).

The order was a small percentage of my portfolio. It’s a risky trade and I don’t wait to lose too much sleep over it if Bitcoin heads south again

I believe we will see more turbulence and weakness in the market until February 16th, which marks the end of the Chinese New Year festivities this year.

However, I couldn’t resist the offer anymore.  I bought XBTM18 contract at a price of $8412, with 3x leverage. The XBTM18 is the first ever six month contract issued by Bitmex.

That means it expires on June 29th.

The market price of Bitcoin, at time of writing is $8300. So I paid an extra $112 to get 3x leverage for the next five months.

My liquidation price is $6333.

The spread on the contract is a pitiful 1%. By historical standards, that’s incredibly low.
By comparison, in an article I wrote on November 3rd, 2017 “Bitcoin: Amateurs Versus Professionals”the spread was 7.9% for a contract that was to expire in less than two months.

If the spread stays this low for another week or two, I will buy more but start to cover the trade by selling Bitcoin short.

I think the chance that the spread will stay at 1% for the next five months is zero.

If we get through the next week without the Chinese government dropping any more nukes on Bitcoin (like shutting down the Bitcoin exchanges in Hong Kong), we should be able to stay above $8000 and go from there.

But that’s just my opinion and I could be wrong.

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I also bought a little bit of Neptune Dash (DASH-TSXv) this morning at 40 cents (currently trading at 38.5 cents).

Again, a small trade. There is very little volume on the stock, only 265,000 traded today with an hour of trading left.

I wrote about Neptune DASH here. It’s a company that buys up DASH masternodes and as such the share price should go up and down with the price of DASH.

Like a lot of the other altcoins, DASH has been hammered in last six months. From a high of nearly US $1500 in December, it dropped to a low of $443 before recovering to $573.

The nice thing about Neptune DASH is that out of 80,193,329 only 11.750,000 are locked up in escrow, leaving just over 79 million shares free-trading.

So the market should (eventually) start to price the stock on the fundamentals. The financing went through at 50 cents so that’s a wall for the stock to break through, but a lot of the hot money should be have been chased out of the stock by now.

If the market tanks again in the next week or so, I’m comfortable not looking at the stock for the next couple of months and wait for a recovery.

Right now in the crypto-space, there a lot of people who has just been burned and waiting for a bounce so they can get their money out.

I just need to be patient.

Ross.

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