(BTC) Archives

If Bitcoin Then Growth Tech Too

We are closing in on $27,000 and that’s quite the performance for the digital gold Bitcoin (BTC).

It just was last year when Bitcoin was down in the dumps.

I am not here flogging crypto but tech investors should take heed of what is happening in the riskier parts of the asset markets.

Yes, tech growth is quite volatile, but bitcoin even more so.

The price of Bitcoin is already up 72% this year and that will beat most tech growth stocks including the Teledocs and DocuSigns of the world.

This last strong surge is correlated with global banking contagion with even very liberal-based CNBC stating that Switzerland has become a financial “banana republic.”

Bitcoin is often advertised as the alternative asset class to fiat banking precisely because fiat banking has a history of going to zero.

The blowups at Silicon Valley Bank, First Republic, and Credit Suisse offer credible evidence that the strength of the fiat money banking system is trending down rather than up.

Hence the monster rally and this will just make banking more expensive for the unbanked and give the big banks more power and more “too big to fail” status.

Narratives are more powerful in crypto in generating real price movements than any other asset class and no matter what your thoughts on how powerful that narrative is, people actually believe this.

Cryptocurrency initially attracted interest from a niche group of investors following bank failures and government rescues.

While its popularity has grown among speculative investors in the roughly decade-and-a-half since, it has retained a status among some as being an asset more removed from the banking system than stocks and government bonds.

If the Fed decides to slow down the pace of interest rate hikes this is highly bullish for the crypto and tech growth sector.

Crypto investors have been particularly sensitive to regulatory and interest-rate developments.

They tend to pull money from long-bitcoin funds while adding to short-bitcoin products after the Federal Reserve announces interest-rate increases and regulators take action against crypto companies.

Since regulators started to crack down on some of the biggest crypto players, investors have pulled about $424 million from global exchange-traded products.

It’s been a terrible year to short bitcoin as that trade was last year’s rich uncle.

An important part of investing is to avoid searching for that boat that has left the dock.

Investors betting against crypto exchange, Coinbase (COIN), and bitcoin-buying software intelligence firm, MicroStrategy (MSTR), were down 76% and 62%, respectively, this year.

Some investors remain cautiously optimistic about the trajectory of bitcoin’s price, especially as it has surged against the backdrop of a banking crisis.

Although there could be a vicious pullback from the epic surge so far this year, Bitcoin will likely do well along with tech growth stocks in a paused or lower rate interest environment.

Throw in the bank contagion as a supercharger and 2023 is shaping up to be a great year to buy bitcoin and growth tech on the dips.

October 25, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 25, 2022
Fiat Lux

Featured Trade:

(SAVING CRYPTO)
(BTC), (KPMG)

Saving Crypto

Bitcoin Letter

One can’t help but be appalled to see the former driver of global growth China turn radically inward, preferring a deeply authoritarian economic model.

What they had in the Hu Jintao years between 2002 to 2012 was legendary and might not ever happen again.

Friends of mine who have managed to flee China all mention how it was easier to leave before 2020.

Good luck now navigating Chinese lockdowns.

Authorities have made it impossible to leave and they track everything including a digital yuan now.

China and its backward economy have a lot of problems, and the more problems that add up nudge the people to a crypto solution.

I am not saying that every Chinese person will invest in crypto, but for the wealthy ones that usually immigrate to Singapore or Hong Kong, the data backs up my thesis.

KPMG accounting firm has indicated a colossal interest in the crypto market from the wealthy elite of Singapore and Hong Kong.

In fact, a 2022-survey by KPMG found that 58 % of the 30 family-offices and high-net-worth individuals (AUM US$10 m–500 m) across Singapore/HK were already invested in digital assets and a further 34 % intended to allocate funds to bitcoin, stable-coins, ether, as well as DeFi opportunities.

Of those 58 % who already invested:

100 % held bitcoin,
87 % held ether,
60 % bought NFTs/metaverse tokens,
47 % held DeFi tokens.

Beyond that, most already invested only allocated less than 5 % of their portfolio to the digital-asset class (reflecting caution around regulation/valuation).

But since 2022, things have evolved:

In 2025, the global fintech investment in H1 reached US$44.7 billion across 2,216 deals.
In Singapore, fintech (including cryptocurrency/digital assets) pulled in around US$1.04 billion in H1 2025.
Meanwhile in China, the stance toward cryptocurrencies remains very hostile: crypto ownership, trading and DeFi operations in mainland China are being criminalised and enforcement has stepped up markedly in 2025.
And the digital yuan (e-CNY) is being actively deployed: for example, by end Sept 2025, cumulative e-CNY transactions hit RMB 14.2 trillion (~US$2 trillion) and 225 million personal wallets were in circulation.

So: The good news is that there is a pathway that links rich Chinese to the future of crypto, but it’s largely contingent on whether crypto can get its act together or not.

China is ramping up its control over money supply by advancing the digital yuan that they can track and regulate with fine control.

This is really 1984 in its purest form.

As the crypto winter continues, there are indeed some silver linings.

However, crypto needs to be careful that it doesn’t turn into just another centralized version of what the Chinese are running away from.

Decentralization is hard to pull off in the long term as the government will want its cut.

Rome wasn’t built in one day.

October 20, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 20, 2022
Fiat Lux

Featured Trade:

(LOOKING TO MAKE A DIFFERENCE)
(BTC), (NFT)

Looking to Make a Difference

Bitcoin Letter

A non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership.

Like cryptocurrencies, they are also digital tokens.

But compared to cryptocurrencies, which are fungible, or interchangeable, NFTs are singular and unique. Like cryptocurrencies, they exist on the blockchain as cryptographic assets.

The price direction of NFTs is a good way to take a barometer of a speculative technology market underpinning crypto.

I can tell you that the NFT marketplace is dead as a doornail, and like how the price of Bitcoin had been engulfed in a crypto winter during 2022–2023, it’s even worse in the NFT world. Bitcoin has recovered since then, but NFTs haven’t.

How bad?

Multimillion-dollar NFT purchases marked down to $100 kind of bad.

In times when the crypto industry is bullish, NFT prices benefit from being a second-derivative industry.

One might say that it’s just a 3X ETF of Bitcoin and for speculators, this can be either good or bad.

If you don’t believe me about the state of NFTs, let's roll through some of the data points.

In sectors from art to gaming, trading volume and prices collapsed more than 90% from their early-2022 peaks, and by 2024–2025 an estimated 96–98% of NFT collections saw virtually no trading activity at all.

By 2025, global NFT sales sit in the low single-digit billions per quarter, compared with tens of billions at the height of the 2021–2022 mania. Daily volume across major collections now totals only a few million dollars.

The NFT capitulation is solid proof that NFTs are not stores of wealth and definitely aren’t inflation hedges.

I can also say that Bitcoin pretty much failed every test of legitimacy during the 2022–2023 crypto winter.

NFTs and Bitcoin are speculative assets that only do well during a time of increasing liquidity. The reverse holds true as liquidity tightens.

Many of those art NFTs are being bought and sold on OpenSea, the most prominent peer-to-peer marketplace.

Daily trading volume on OpenSea peaked around $2.7 billion on May 1, 2022 and then fell by about 99% to under $10 million a day by late August 2022. By 2025, OpenSea’s annualized marketplace revenue is in the low tens of millions of dollars, a fraction of its peak activity.

Personally, I don’t believe in NFTs long term, I don’t get how a digital certificate will hold weight.

I rather have a real physical certificate that shows I own something like a real estate deed.

For those who might think NFTs could hold more utility in the future, then I am another hater you must convince.

Preaching to me about how long-term prospects are positive and investors should buy the dip is laughable.

Any serious asset doesn’t go down 95% in one year without a crisis and in the short-term survival of NFTs isn’t guaranteed. For most collections, prices remain more than 90% below their 2021–2022 highs even in 2025.

This was a fad that caught on and rode the hysteria of Bitcoin to relevance and now is being dumped faster than one can imagine.

Back in 2022, as markets braced for a Fed-induced recession that ultimately turned into a slowdown rather than a deep, official downturn, it was hard to believe Americans would be interested in buying an NFT when they worried about keeping their jobs - and even in 2025, high rates and lingering inflation shocks have left little appetite for ultra-speculative JPEGs.

Surveys show that roughly half of U.S. adults have heard at least a little about NFTs, while globally about 47% of consumers have never heard of them at all, only 7% say they know exactly what they are, and roughly 1% actually own one.

But most understand that securing shelter and food during unemployment is more important than throwing money down the toilet.

Avoid the NFT asset class, period.

October 18, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 18, 2022
Fiat Lux

Featured Trade:

(ANOTHER PATH GETS SHUT DOWN)
(BTC), (PORTUGAL)

Another Path Gets Shut Down

Bitcoin Letter

The best-kept secret is that Portugal was one of the biggest beneficiaries of loose crypto restrictions for the past decade.

The bulk of the Mad Hedge Concierge client list is made up of numerous crypto investors that got into bitcoin at less than $100 to ride the wave up.

Yet, it is common knowledge that the United States treats digital currency as property and taxes it similarly to stocks or real estate.

Why have crypto holders been flocking to Portugal?

Crypto gains were not taxed at all for most of the 2010s and early 2020s.

It made sense for any crypto success to apply for Portuguese residence and take proceeds of the crypto in Portugal without losing a dime.

Over the past decade, Portugal has become an appealing destination for international residents, who have flocked to the country due to its more flexible visa and immigration options and overall affordability.

The weather and food are amazing.

Why do I suddenly bring up Portugal now if it is such a crypto tax haven?

The Portuguese government implemented a new cryptocurrency tax framework in its 2023 national budget, which has been in force since January 2023.

Within the nearly 450-page macroeconomic strategy and fiscal policy report, a small section established a 28% capital-gains tax on cryptocurrency gains made within one year.

However, gains realized after one year of holding the crypto assets remain exempt under the finalized law.

The Portuguese government also applies stamp duty (10%) on gratuitous transfers such as gifts and inheritances, and a 4% stamp-duty charge on crypto-service-provider commissions.

The framework was designed to treat crypto as equal to other industries and to establish a clear, standardized taxation environment. Twenty-eight percent is the standard capital-gains tax rate in the country.

If these new crypto taxes are implemented, it is nothing short of a disaster for crypto holders who trade short term even if the ones holding over one year are exempt.

Expect trading volume to plummet.

I can guarantee it will face a mass exodus, like India, as companies and investors flee to lower-tax nations.

At this point, it appears as if bad news is piling on top of bad news.

Governments around the world are strapped for cash as historical debt loads worry finance ministers.

There’s a massive hunt for the incremental tax dollar and crypto was the low-hanging fruit in Portugal.

I don’t recommend any Bitcoin investor to apply for Portuguese residence because it lost its tax-free advantage in 2023, even though long-term gains are still not taxed.

The interest in crypto is at a 10-year low with some of the biggest daily outflows occurring during the market stress events of 2022–2023; current long-term exchange flows in 2025 are more stable.

Moreover, large exchange outflows did occur during that 2022–2023 period, though current 2025 figures no longer match those extremes.

Investors have clearly lost interest in crypto which is why we are seeing sparse volatility.

Buyers and Sellers have both fled.

Now, cross Portugal off the list.

Moving forward, crypto investors must be nimble as the multiple crises around the world mean that governments will go after crypto dollars harder, giving fewer places to take proceeds for minimal or no tax.

These events are all highly negative for the price and health of Bitcoin.

October 6, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 6, 2022
Fiat Lux

Featured Trade:

(MAX OUT CRYPTO)
(BTC), (MAXI)

Max Out Crypto

Bitcoin Letter

One of the big knocks on the digital gold or crypto is that it doesn’t generate some type of annuity-like payment.

That’s right, it doesn’t.

It’s not like a rental property that pumps out dollars every month.

That honestly turns off a lot of people.

I get it.

Getting those Benjamins to fill pockets for investors is a comforting feeling.

Instead, crypto holders are rewarded by the appreciation of the asset itself.

Speculative investors must wait for the price of crypto to elevate and sometimes it doesn’t so investors can’t cash out.

For the first time in the history of crypto products, the ETF Simplify Bitcoin Strategy PLUS Income ETF (MAXI) is designed to solve that challenge.

It combines investments in the bellwether coin crypto bitcoin with derivative-based income-producing products.

The Simplify Bitcoin Strategy PLUS Income ETF (MAXI US) is listed on Nasdaq with an expense ratio of about 1.00%.

The fund’s options sleeve is actively managed and consists of opportunistically selling short-dated put or call spreads on the most liquid global equity indices.

The management of MAXI described the portion of income-generating opportunities as “padding.”

However, that doesn’t adequately describe the large risk of what they are actually doing.

They are talking about this ETF as if the “income” is almost guaranteed.

But the risk here is that selling option calls and puts can be extremely loss-making and they fail to disclose that to investors.

This type of Frankenstein investment is definitely an interesting spin on crypto products by combining a derivative portion to the speculative crypto part.

There are many moving parts to this and due diligence is necessary.

In addition to the high risk, the management fee is a big turn-off.

The fee is to basically fund the operation, but it’s no guarantee that the derivative portion of the portfolio will be successful.

They claim they will generate income by writing short-dated option spreads on the “most liquid global equity indices,” yet as of 2025 the portfolio is still dominated by exposure to the iShares Bitcoin Trust (IBIT), along with a small sleeve of listed call options and index-based spreads.

The opaqueness doesn’t sit well with me and it shouldn’t with you.

The prospectus explains that the “options overlay strategy will invest up to 20% of fund’s assets,” which remains true in current filings.

Therefore, it could either be 0 or 20% of the ETF capital exposed to complete losses because the traders bet on the wrong short-dated strategy.

Essentially, investors have no idea what they are investing in.

What if there are no “income generating” profits and they are all losses?

Surely, they must be refunded to the customers, but I highly doubt it.

Adding speculation on top of speculation usually ends up badly and that is exactly what personifies MAXI.

Buy it for the asset appreciation or avoid it, but then might as well just buy Bitcoin itself.

This ETF needs to be avoided at all costs.

October 4, 2022

Bitcoin Letter

Mad Hedge Bitcoin Letter
October 4, 2022
Fiat Lux

Featured Trade:

(ANOTHER SLIP-UP)
(FSOC), (MAX), (BTC), (ETH)

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