3 Ways to Play FTX’s Collapse
Posted November 11, 2022
There are thousands of takes on FTX.
But I don’t see anyone talking about how to seize the day.
I’ll keep this one short and sweet…
Here are three assets that will benefit from FTX’s failure.
The most mainstream centralized crypto exchange. People who are nervous (as many many are) will move crypto assets to Coinbase.
The 52-week high on Coinbase is 355. Right now it's around 50 (the 52 week low was 44).
2. Bitcoin / GBTC
GBTC is like a closed-end fund that owns just bitcoin. You can buy it on the Nasdaq.
Here's the thing…
It's trading at a 40% discount to the dollar amount of the Bitcoin it holds.
This happens sometimes when people panic sell closed-end funds. The stocks trade at discounts to the value they hold. It's like being about to buy a wallet with $100 in it for $60. It's not rational but this happens often in irrational markets.
A month ago, a friend of mine was buying GBTC when it was at a 20% discount to the value of Bitcoin it held.
He told me, "this is the greatest discount it's ever had."
Well, now it's at a 40% discount, which is sort of ridiculous.
This means Bitcoin can go down another 40% and you still probably won't lose much money if you buy GBTC.
But if Bitcoin goes up, GBTC will go up more than Bitcoin because the value of its holdings will increase and the discount will most likely go back to a normal 8-10%.
Probably the safest DeFi exchange.
This exchange will also benefit from the collapse of FTX and is 80% lower than its all-time high.
[Chris’ note: Out of respect for our Early Stage Crypto Investor subscribers, we can’t disclose the third pick here. But if you want to get in on a slew of early-stage cryptos while there’s blood in the streets… the third one included… look no further: Click here for more details from James.]