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Bitcoin: Shorting MicroStrategy?

Updated: Apr 1

If you've been following us we've been bullish on Bitcoin throughout 2023 and 2024 when it was going up. That's after having been bearish on Bitcoin in 2022 when it was going down.

Our last public post called out a Bullish Bitcoin target of 60,000 in December 2023 when Bitcoin was at about 40,000.

After Bitcoin hit 60,000 we reset our target to 80,000 to subscribers.

But with the fundamental, yes fundamental backdrop, there's nothing stopping Bitcoin from going even higher. [To find out our key fundamental driver that most are not talking about join with a free trial.]

I wanted to respond to a short report that came out today on MicroStrategy (MSTR).

Uh. Maybe they're right and maybe they're wrong, but what would I say about shorting something in a bull market?

Can you guess?

Quick question. Is it good or bad generally to short in a bull market?

No matter how smart you are and how good your thesis is, it's very tough to get in front of a (market or live) bull.

And please remember one of my favorite trading expressions; dumb trader is smart trader.

The short report out today probably makes a ton of sense... to smart analysts.

But in my career I built a fond respect for traders that look at things simply. I've seen that those pro traders make the most money. I call it 'dumb trader.' No, the people are not dumb they are very smart. But they are smart for keeping things simple. Up is up and keep it simple. Dumb traders identify a simple trend and keep things simple and stick to it. I think 'dumb traders' are really smart traders and I think the most successful traders.

So to a smart analyst, this short report probably makes a ton of sense, right?

"Yeah this guy makes a lot of sense."

But to dumb traders, they're like, 'uh, hasn't this thing been going up anyway?'

I don't think it's a good idea to start making value calls on things going to the moon for no valuation reason to begin with.

There is no fundamental valuation for a Bitcoin except for supply and demand and even things that don't make sense can go up in a bull market.

Did today's report change anything that wasn't already known? Nope. The market is much smarter than any 'smart' analyst. There's underlying reasons why things don't make sense and usually can lack sense far longer than a trader has capital to support an opinion that goes against the market.

MSTR is a stock also which allows some investors to get in where a country's laws don't allow investment in crypto.

More countries are allowing crypto investment so I'd agree that MSTR carries with it less value.

But I think that generally things can trade above fair value in a bull market and there's also the knowledge that owning a share today means you'll be owning more Bitcoin in the future as MSTR keeps buying more Bitcoin. It's a crazy ridiculous leveraged strategy, and crazy ridiculous leveraged strategies in a bull market... um, dumb trader, uh, I'm not shorting that.

Keeping it simple.

My opinion, but shorting something that's been going to the moon? Good luck with that.


Wishing you all continued success.

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. Opinions given are at this moment and can change rapidly after this is published. If our calls are made public (outside the service) we may or may not update our opinions publicly. 

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