Bitcoin Without the Hassle

November 26, 2024

Hey traders,

Today, I’m diving into something I’ve never really talked about much before — Bitcoin.

Now, I know it’s all over the news, pushing close to $100,000 per coin, but that’s not where I’m going with this.

Today, I’m showing you a way to get exposure to Bitcoin without actually owning it. And the best part? You don’t have to deal with the hassle and risks of holding Bitcoin directly.

Let’s dig in.

The Problem with Buying Bitcoin

First things first — holding actual Bitcoin isn’t exactly a walk in the park.

You’ve got to set up a wallet, deal with the security risks…

And let’s not forget the fact that if you forget your password or your hard drive crashes, you could lose those coins forever — there’s quite literally no way to get them back.

So, what’s a safer and easier way to get in on the Bitcoin game? I’ve got just the thing for you.

Enter Blackstone’s Bitcoin ETF: IBIT

Blackstone offers a Bitcoin ETF, ticker symbol IBIT, that gives you direct exposure to Bitcoin — without the need for a crypto wallet or worrying about the usual Bitcoin hassle.

You’re essentially buying into a fund that holds Bitcoin, and as the price of Bitcoin goes up, so does the value of IBIT.

It’s similar to buying ticker symbol GLD if you want to track the price of gold or ticker symbol SPY to track the S&P 500.

What’s even better? You don’t have to worry about sky-high commissions and fees that come with buying and selling Bitcoin.

With IBIT, there are no commissions and only a management fee of less than 1%.

That’s one of the things I like about IBIT — you can get exposure to Bitcoin with a much lower cost than going through traditional crypto platforms.

But Wait — There’s More

Here’s where it gets interesting.

While it’s not news that Bitcoin has an ETF, IBIT has options available for trading, and that’s where the real opportunity lies.

Most Bitcoin ETFs don’t have great options due to the way they’re structured, but IBIT gives you the ability to trade options on Bitcoin — and these options are juicy.

I’m not saying Bitcoin is going to keep going up — but, full disclosure, I am personally long Bitcoin and IBIT.

So here’s what you need to know: IBIT is as volatile as Bitcoin itself, and as I’ve often said to you in these pages, volatility equals opportunity.

The Key to a Successful Trade: Directional Bias + Volatility

If you’ve been following me for the last 20 years, you know the two things I look for in a trade are directional bias and volatility.

Let me explain what that means:

Directional bias is simply whether I expect a stock or asset to go up or down. It’s like picking a direction — is the wind blowing north or south? A strong directional bias means the price is moving steadily in one direction, either up or down.
Volatility, on the other hand, refers to how much the price swings around. The more it swings, the more potential there is to make money, especially when you’re trading options. Think of it like a roller coaster ride. A volatile stock or ETF moves up and down a lot, which creates opportunities to profit if you know how to manage it.

Here’s the great part: IBIT has both.

It tracks Bitcoin, and as Bitcoin fluctuates, so does IBIT. This makes it a great stock to trade — especially for those who like to play the odds with options.

How to Play the IBIT Options

Now, here’s the important part: If you’re thinking about jumping into IBIT, I’d advise you to sell call options instead of buying them. Here’s why: IBIT’s options are high premium, and you can sell them to collect cash upfront.

To test this out, look up the price of an IBIT call option expiring in about a month. Pick a strike price that’s about 5-10% higher than the current market price, and divide the option price by the current market price of IBIT.

You’ll be surprised by the percentage yield you could earn — 1%, 2%… even 3 or 4% in a short amount of time. That’s the kind of opportunity we’re talking about.