BTC & RIOT Down 50%

BTC and RIOT down 50% last week.

Well, not quite those circumstances. It’s just a lot easier to have the first sentence to be for SEO, otherwise I have to click like 3 different buttons and manually enter something beside me just typing whatever comes to mind. Before I go into why Bitcoin dropping to $36,000 isn’t a bad thing, I want to share the image and title that I really wanted to use.

WTF IS THIS MICKEY MOUSE BULLSHIT?!

First things first. As I’ve stated since the beginning of time (October 2020), most of Bitcoin’s upward movement isn’t an increase in value, it’s a loss of value for the USD. Trading it like a commodity during the Reddit Robinhood fad obviously added speculative value, but now that the kids are back in school…holy crap it’s almost June…..

Anyway, Bitcoin didn’t gain value, the USD lost value.

“But Rocky!”, you say as I interrupt, “Think of $36,000 being what $28,000 was.”

“But Rocky!”, you continue, “I haven’t followed any of your blog articles…. in fact, no one has.”

I’m certainly not about to explain how inflation works, and how Bitcoin is a currency and not a commodity all over again.

Bitcoin has increased in value, helped in part by Tesla and PayPal buying a bunch of it up. Also, VISA now can conduct transactions in Bitcoin. Ultimately, the “right” way to use Bitcoin is to have a wallet on your phone to store whatever you want to spend, and the rest on a cold wallet. But for easymode, you can use a Coinbase VISA card to spend off your BTC or other cryptos. You probably have to pay the fee for exchanging currencies, though. Unless the merchant accepts BTC.

ANYWAY, BTC has a finite amount. Gold does, too, sort of, but humans will never finish mining all the Earth’s gold. Also, other planets, asteroids, etc. Once the final Bitcoin is mined, that’s it. There won’t be more to find and mine. Having a crap ton of coins held by Tesla, and just sitting on them, effectively removes a certain amount from the pool of currently transactable bitcoins.

Just imagine if someone held 50% of all bitcoin, then destroyed 90% of their holdings. You can totally do this…just push all your coin to your Ledger, then smash it with a hammer. Bye-bye Bitcoin. Forever. I’m surprised this hasn’t come up more in the media. Probably because there’s still more BTC to mine.

Think of the aristocrat who buys the last 2 rare vases from ancient China or some such. Then he intentionally smashes one. The remaining vase just doubled (more than doubled, technically) in value.

Oh right, the whole point is, don’t you worry about Bitcoin. If you have actual BTC, you aren’t sweating it. If you fell into the hype of eToro and trading hypothetical crypto contracts on Robinhood, then you’re probably upset that you "lost” so much USD. But I digress. Point #1 has been established - The exchange rate of USD to BTC is really a very unimportant number and doesn’t matter when you buy stuff with BTC. (It matters if you’re buying stuff with USD that you acquire with the BTC, of course. Like the Coinbase VISA card at Wal-Mart).

Yes, RIOT. The price is like $23 right now. Which is great news for the call I sold at $27 strike on Monday. I just want the premium.

Repeatedly I’ve stated that $40 is our “normal” price. I just deleted a whole bunch of lines of text to explain this, then realized you don’t care about reasons. I stand by RIOT 100%. If it’s under $40, buy.

While the company’s share price has benefited from BTC’s exchange rate to the USD, they engage in cultivation of blockchain technologies beyond just mining Bitcoin. In regards to mining cryptocurrency, however, they invested heavily into some ridiculous amount of miners last year. If I’m not mistaken, they were to be in operation sometime in February.

Now if RIOT had made that investment decision in 2021, it’d be a no-go for our investing. Granted we’re mostly doing buy-writes and using LEAPS for PMCCs, but that’s not the point. If we wouldn’t trade the stock, we shouldn’t be trading the options. Not while we’re still using Robinhood to make money while checking Tinder.

There are other facts and reasons involved in RIOT having survived a period of time when their future was more uncertain….but we don’t care about that. It’s time for a shower.

TLDR
1. BTC gained a little, USD lost a lot
2. RIOT is still our jam
3. Covered Calls