JPMorgan Bought Strategy While Betting Against It

From Yesterday's Simply Bitcoin Live | Episode 1634

The Numbers

The drop to the 200 week average lined up almost exactly with Binance announcing its hack losses are fully covered.

The News

JPMorgan's third quarter 13F, filed this week, shows the bank raised its Strategy stake 36% to 848,932 shares worth $131.3 million, while its put options on the stock, which pay out if the price falls, jumped 60% to cover 1.15 million shares. It also grew its Bitcoin ETF position to 11.4 million IBIT shares worth $540 million.

The filing landed days after MSCI confirmed it will drop Strategy from its indexes after the November 30 close, a move JPMorgan's own analysts had estimated could force $2.8 billion in index fund selling. The bank is positioned to profit if the stock drops and still holds a bigger bet that it does not.

The MSCI story gets stranger from there. Days after booting Strategy and Metaplanet for being non-operating Bitcoin holders, MSCI is adding The Smarter Web Company, a UK web design firm sitting on 2,850 Bitcoin, to its micro cap index. Same balance sheet logic, different verdict.

Wall Street wants Bitcoin exposure. It just does not want Saylor's version of it to win.

Bitcoin broke below $70,000 overnight, bottoming near $67,600 before stabilizing around the 200 week moving average near $67,900. Five straight weeks of billion dollar liquidations preceded the drop, and this week's leg down landed the same day Binance published a new proof of reserves statement saying it has fully covered the losses from its $6.3 billion hack.

The leverage data tells an unusual story. Liquidation maps show roughly $14 billion in short positions stacked above the market against under $1 billion in longs below it, a setup that makes a sharp move higher at least as plausible as further downside now that the exchange has less reason to keep pressing the market down.

The same force that flushed the longs for five weeks just ran out of a reason to keep doing it.

The Culture

Fellow creator Brian Harrington reacted on his own show to a tweet Opti posted this week, that the longer you hold Bitcoin, the more you realize everyone is full of it. Harrington's take: Bitcoin does not break to new highs until the people holding it stop acting like a clique, because the kind of institutional credibility that moves markets goes to people who look like they have their life together, not to inside jokes about hiding your stack from your spouse.

Opti agreed on air. Making Bitcoin normal to the people who actually move capital, the real estate guy, the CEO, the private school dad, means Bitcoiners have to be the proof, not just the argument. Get fit, get the finances in order, stop performing poverty as a personality trait.

You are either the walking billboard for Bitcoin, or you are the reason someone never gets in.