The Tesla (TSLA) options trade we put on this week doubled in less than 10 hours of trading.
We’re long the common stock too; it’s up 14% since we bought it.
Our TSLA trades are only crypto-related – this is a “sentiment squeeze,” first and foremost.
But Tesla does own more than $1 billion in Bitcoin (BTC).
And Elon Musk has not been shy about his feelings for cryptocurrency.
That’s something Elon and I share in common: We believe in Bitcoin and crypto for the long term.
We’re thrilled we were able to take half off the table yesterday on our 100% winner in TSLA options.
But the upside for Bitcoin and crypto from here looks like the moon to me.
That’s why we opened another long position this week.
And we look forward to sharing complete details about our trades as soon as possible…
It’s Only Getting Bigger
I was on the phone Friday afternoon with the founder and CEO of a company that makes crypto mining equipment.
He’s pretty excited about this long-term trend:
Did you know it’s possible to heat a pool with the excess heat from crypto mining?
I know this because I’m using my Bitcoin mining unit to heat my pool. It’s being installed as we speak.
I’m fascinated by the infrastructure – the picks and axes, if you will, and, yes, the pool-heaters…
I’m a private investor in several crypto infrastructure companies. And I’m an investor in multiple crypto-related hedge funds.
I bought another CryptoPunk last month.
This is the “blue-chip” non-fungible token (NFT) collection on the Ethereum blockchain.
Coming into this cycle I only owned one. I bought it years ago. Now I have a second NFT I can trade.
I already have a seven-figure crypto portfolio.
And then we added new crypto-related long positions in the stock market to go with the positions we opened last week.
I think BTC and crypto are here to stay. I think they only get bigger and more interconnected with our everyday lives.
I’m already basically all in. And yet I’m adding exposure.
Here’s the thing…
Our new crypto-related trades have no impact on the decision-making for our existing trades.
I look at them in a vacuum – they are their own separate prices. We have strategies for each of our positions, based on risk and reward at the time we open them.
I don’t ignore potential crypto-related equity trades because “I’m already long.”
I also don’t go out of my way to add crypto-related equity trades because I’m already long.
I go into it with a neutral bias. “Just trade what’s in front of you,” is how I learned it.
That’s what we’re doing here. It’s working. I expect it will continue to keep working.
The Bitcoin and crypto opportunities will continue to expand.
And we’ll keep sharing them with you.
Are you with me?
This Week in Everybody’s Wrong
On Monday, we observed that the company formerly known as Microstrategy (MSTR) is above its prior-cycle highs in new all-time high territory.
And we showed you how rabbit mating rituals help us define risk.
Here’s why we’re looking to get long MSTR.
On Tuesday, we corrected some misperceptions about volatility and the “fear index.”
We broke it down to one principle – divide the VIX by 16 to get an estimate of a daily market move – and two general rules.
Here’s why we want to sell high volatility and buy low volatility.
On Wednesday, we saw that Bitcoin (BTC) is acting more like Gold and less like the Nasdaq-100.
At the same time, the U.S. Dollar continues to break down.
Here’s why the world’s No. 1 cryptocurrency is breaking away.
On Thursday, we took it all the way back to Technical Analysis Kindergarten.
Former resistance is turning into support – just like they draw it up – and polarity is in play.
Here’s why I refuse to fight Papa Dow.
On Friday, we talked about how Amazon (AMZN) is the biggest Consumer Discretionary stock in the U.S.
We’re watching AMZN 190 because of what the stock and the sector mean for the market.
Here’s why AMZN might be the most important stock in the world.
Have a great weekend.
I’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs