Bitcoin dropped. Retail traders watched their portfolios turn into digital ash. Now some genius on Wall Street figured out the play: short it after it already fell.
The strategy summary warns that shorting bitcoin or high-beta crypto equities after a steep decline carries immense tail risk. Immense tail risk. That's finance speak for "you will get your face ripped off when Elon tweets a laser-eyed emoji at 3am on a Tuesday."
The unique trade here is apparently waiting until bitcoin finishes eating sh*t, then betting it will eat more sh*t, while knowing full well that crypto has a documented history of rising from the dead like a financial zombie that feeds on margin calls. Unique is doing a lot of work in that headline. So is trade.
High-beta crypto equities already moved like they were designed by a casino that wanted to get shut down faster. Shorting them after they collapsed is like showing up to a building that already burned down and lighting a match to make sure the fire is really out.
Summer swoon sounds pleasant. Summer swoon sounds like something that happens to a debutante at a garden party. Bitcoin didn't swoon. It got taken behind the woodshed and shown what volatility actually means.
The tail risk sits there in the summary like a disclaimer on a cigarette pack. Everyone reads it. Nobody cares. They short anyway because they saw the chart going down and their brain made a straight line into the future.
Shorting crypto after it crashes is not a trade. It's a tuition payment to the market with extra steps and a brokerage fee attached.
Photo by Kanchanara on Unsplash
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