Cryptocurrency stocks are crashing together. How do we trade in the next step?
Recently， the US stock market has crashed…
Cryptocurrency-related stocks were hit particularly hard, facing the dual headwinds of an underwhelming rate cut and Powell’s remarks. Bitcoin has fallen below the critical $100,000 mark, with a cumulative drop of over 10% from its peak to its current price. Related stocks, such as MSTR and Coinbase, have also plummeted by more than 20%.
Although many investors remain optimistic about the future prospects of cryptocurrencies, this situation has shaken confidence. After all, when faced with volatile stocks, it’s hard to stay calm. The dramatic ups and downs amplify human weaknesses of greed and fear.
So, what’s the next move? According to Zhishi Tiger, in an uncertain market, the key is to focus on finding certainty. But what exactly is “certainty,” and what is “uncertainty”?
In the short term, the ups and downs of crypto-related stocks are uncertain, but increased volatility is certain.
Whether it’s worth chasing crypto-related stocks is uncertain, but the price levels after a sharp decline are undoubtedly safer.
Based on the above two points, the operational logic at this moment shifts to selecting a safer price point to short volatility. FCNs (Fixed Coupon Notes) become an excellent choice for two reasons:
Increased volatility makes the stable coupon rate of FCNs more resistant to risk.
A relatively low strike price ratio provides a sufficient safety buffer.
For example, take the current FCN pricing for MSTR:
Term: 3 months
Annualized coupon rate: 39%
Strike price ratio: 70%
Let’s start with the coupon rate. An annualized rate of 39% translates to approximately a 13% return over three months. While this is slightly lower than the rates during MSTR’s recent surge, the current strike price ratio is based on the post-crash price of $326. At 70%, that equates to a strike price of $228. So, how safe is this level?
If we roughly calculate based on this ratio, MSTR would need to drop another 30%, which would imply Bitcoin plunging by about 15%. This would mean Bitcoin’s price would return to the levels seen before Trump’s election victory, essentially erasing all previously priced-in optimism. In other words, the bird would have flown, leaving no trace in the sky—an unlikely scenario.
Therefore, while the coupon rate isn’t as high as it was before, the safety level is unquestionably far better than it was a month ago.
That’s all for today’s sharing! If you’re interested in FCNs, feel free to click Yielding Hunting to inquire and place your orders!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Despite the uncertainty, focusing on finding certainty is key, and Fixed Coupon Notes (FCNs) are presented as a safer option. FCNs offer a stable return in volatile markets, and their low strike price ratio provides a sufficient buffer against further declines. For example, MSTR’s FCN, with a 39% annualized coupon rate and a 70% strike price ratio, provides a safety margin that makes it a more secure investment. In my opinion, this strategy allows investors to minimize risk while still benefiting from the market's volatility, making it a prudent move in uncertain times.
是否值得追逐加密貨幣相關股票尚不確定，但大幅下跌後的價格水平無疑更安全。
儘管許多投資者對加密貨幣的未來前景保持樂觀，但這種情況動搖了信心。畢竟，當面對波動的股票時，很難保持冷靜。戲劇性的起伏放大了人類貪婪和恐懼的弱點。
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