Hi traders, just a short opinion piece that I'd like to share with you regarding my strategy leading up to the CBOE's Bitcoin ETF decision in August 2018/September 2018.
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Think like a trader, not a gambler.
I've re-read both SEC decisions to reject the Wiklevoss's ETF (March 2017 and July 2018) and, as I shared in my last market update, I think that last decision casts some serious doubts on the fate of the CBOE's ETF proposal. If I had to put this in terms of probabilities. I'd say there is a 60% chance that the SEC will reject the proposal.
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Some people have argued that CBOE's ETF is an entirely different product to the Winklevoss' and they're right, CBOE's is a much more complete package but the fundamental reason why a Bitcoin ETF was rejected in 2017 and again in 2018 lie in "the threat of market manipulation", which we now have way more evidence of (USDT/Bitfinex wash-trading scandal, fake volumes on Asian exchanges, liquidity coming from money laundering, miners dumping their coins to cover their overhead costs , etc.) than back in 2017 when market manipulation was already cited as the main reason to reject an ETF.
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Long story short I am quite pessimistic regarding the fate of CBOE's ETF and I would encourage you to also be very careful and to not fall for the irrational enthusiasm around this event that we are seeing on social media. I was around back in March 2017 when the Winklevoss' ETF was rejected and, although the market recovered pretty quickly afterwards, market conditions were somewhat very different back then.
My point is that taking an anticipatory trade at this point makes no sense and is no different than gambling... which as traders we do NOT partake in. So my advice for you is this: keep your dry powder and wait for the SEC to make up their mind instead of trying to flip a coin on the outcome of this potential black-swan event.
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Worst come the worst, SEC reject the ETF and you'll then have plenty of ammo to buy the dip. Best case scenario, SEC approve the ETF, wait out the initial pump, get in on the first dip and enjoy the bull ride.
That way you'll win regardless of the outcome.
Until then,
FØx.
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May the FØx be with you.
