He announced it during the election campaign, and on Thursday evening, President Trump signed an Executive Order creating a Strategic Bitcoin Reserve (SBR) and a digital asset stockpile. The Executive Order says that the SBR and the Stockpile would NOT involve the government purchasing Bitcoin or other cryptocurrencies. It would be formed from cryptos already controlled by the government from assets they have seized from various previous criminal cases.
No new Bitcoin would be purchased unless it can be purchased in a “budget neutral” way, whatever that means.
The problem with an Executive Order is that the next president can sign a new Executive Order, undoing whatever this Order says. Senator Cynthia Lummis sponsors the BITCOIN Act, which, if passed, would be more permanent, but it has not yet happened and perhaps never will. So, we are in a four-year holding pattern, waiting to see what the next president will do.
That’s why Friday’s Crypto Summit at the White House was a “Buy the Rumor, Sell the News” event. Here’s the one-year chart of Bitcoin:
As you can see, Bitcoin rallied strongly before the November election and peaked at around $107,000 at the end of 2024. There was a period of consolidation before the final (so far) all-time high of $108,000 on January 20, 2025. Since then, Bitcoin has been down 22%, but it was down as much as 28.5% at the end of February.
Zooming in, it’s obvious that Bitcoin was trading between $92,000 and $99,000. It had two pops above that range but has recently traded primarily below $92,000. The next obvious level of support is $74,000, approximately where we were on election day.
Every Bitcoin Guru warns that Bitcoin could fall to that level of support, leading most speculators to take a “wait and see” approach. If Bitcoin can test that level and hold, everyone will assume that’s the bottom, and the bull market can resume.
If Bitcoin hits $70,000, panic will ensue, and $50,000 is in play.
So how do you play it?
If you believe that long-term Bitcoin is going up, you ignore the noise and dollar cost average every week.
If you are a degenerate speculator, like me, you play MSTR—Microstrategy Inc. The recent chart is informative.
The long-term upchannel that started a year ago remains intact. The gap up at $293 from election day in November 2024 is both support and resistance. MSTR closed at $287 on Friday, slightly below that key resistance level. The trend since the all-time high in November 2024 has been down.
If you believe MSTR is a stupid Ponzi scheme, you don’t own it, so my comments are moot.
If you believe MSTR is subject to wild speculative swings (which it is) but that both MSTR and Bitcoin are going up in the long term, the strategy is simple: Hold and Cover.
That’s why I’ve been doing, with varying degrees of success.
I currently have two open covered call positions, both purchased within the last week, and both expiring on Friday March 14:
- the $300 strike price calls, sold at an average price of $19.00, and currently worth around $11, so I am in the money by 42%. That’s good.
- the $295 strike price calls, sold at $9.25 and currently trading at $13, so I’m down by 40% on that position. That’s not so good.
Both of these positions are out of the money, so if MSTR stays where it is this week, the positions will expire worthless, and I will pocket the premium. But MSTR can swing wildly, so my plan is to watch closely this week, and when my positions get to a profit of around 75%, I’ll buy the options back to cover. I’m not waiting for a 100% profit, because on options expiry day MSTR can swing upward and I’m busted.
So, that’s the plan.
HODL, but pocket some premiums along the way.
It appears that Trump is engineering a stock market correction and a recession. He wants to do it early in his term to blame Biden and save the day before the mid-terms in less than two years.
So, it will be a bumpy ride, and I wouldn’t blame anyone for staying on the sidelines.
Let’s see what happens. See you next week.
Strategic Bitcoin Reserve – Buy the Rumor, Sell The News
by JDH on March 8, 2025
He announced it during the election campaign, and on Thursday evening, President Trump signed an Executive Order creating a Strategic Bitcoin Reserve (SBR) and a digital asset stockpile. The Executive Order says that the SBR and the Stockpile would NOT involve the government purchasing Bitcoin or other cryptocurrencies. It would be formed from cryptos already controlled by the government from assets they have seized from various previous criminal cases.
No new Bitcoin would be purchased unless it can be purchased in a “budget neutral” way, whatever that means.
The problem with an Executive Order is that the next president can sign a new Executive Order, undoing whatever this Order says. Senator Cynthia Lummis sponsors the BITCOIN Act, which, if passed, would be more permanent, but it has not yet happened and perhaps never will. So, we are in a four-year holding pattern, waiting to see what the next president will do.
That’s why Friday’s Crypto Summit at the White House was a “Buy the Rumor, Sell the News” event. Here’s the one-year chart of Bitcoin:
As you can see, Bitcoin rallied strongly before the November election and peaked at around $107,000 at the end of 2024. There was a period of consolidation before the final (so far) all-time high of $108,000 on January 20, 2025. Since then, Bitcoin has been down 22%, but it was down as much as 28.5% at the end of February.
Zooming in, it’s obvious that Bitcoin was trading between $92,000 and $99,000. It had two pops above that range but has recently traded primarily below $92,000. The next obvious level of support is $74,000, approximately where we were on election day.
Every Bitcoin Guru warns that Bitcoin could fall to that level of support, leading most speculators to take a “wait and see” approach. If Bitcoin can test that level and hold, everyone will assume that’s the bottom, and the bull market can resume.
If Bitcoin hits $70,000, panic will ensue, and $50,000 is in play.
So how do you play it?
If you believe that long-term Bitcoin is going up, you ignore the noise and dollar cost average every week.
If you are a degenerate speculator, like me, you play MSTR—Microstrategy Inc. The recent chart is informative.
The long-term upchannel that started a year ago remains intact. The gap up at $293 from election day in November 2024 is both support and resistance. MSTR closed at $287 on Friday, slightly below that key resistance level. The trend since the all-time high in November 2024 has been down.
If you believe MSTR is a stupid Ponzi scheme, you don’t own it, so my comments are moot.
If you believe MSTR is subject to wild speculative swings (which it is) but that both MSTR and Bitcoin are going up in the long term, the strategy is simple: Hold and Cover.
That’s why I’ve been doing, with varying degrees of success.
I currently have two open covered call positions, both purchased within the last week, and both expiring on Friday March 14:
Both of these positions are out of the money, so if MSTR stays where it is this week, the positions will expire worthless, and I will pocket the premium. But MSTR can swing wildly, so my plan is to watch closely this week, and when my positions get to a profit of around 75%, I’ll buy the options back to cover. I’m not waiting for a 100% profit, because on options expiry day MSTR can swing upward and I’m busted.
So, that’s the plan.
HODL, but pocket some premiums along the way.
It appears that Trump is engineering a stock market correction and a recession. He wants to do it early in his term to blame Biden and save the day before the mid-terms in less than two years.
So, it will be a bumpy ride, and I wouldn’t blame anyone for staying on the sidelines.
Let’s see what happens. See you next week.