BTFD!

 

January historically has been a great month to pick up cheap Bitcoin. Over the past five years, Bitcoin has turned bearish during this month and has, eventually, recovered from its drop (although it took a little longer in 2014 and 2015).

Creative traders who believe that Bitcoin will indeed again recover from this current market slump can look at ways to increase their alpha while holding Bitcoin using BitMEX products.

At the time of writing, XBTH18 and XBTM18 are trading at $100 and $800 premiums over a spot price of $10,950, which translate to 4.6% and 16.5% annualised premiums, respectively.

Historically, the basis on the fixed-date products trade on average around 25% to 30% annualised basis levels and thus these trades could be an extremely cheap way to pick up cheap Bitcoin.

For example, consider if the basis reverts back to its historical average immediately at the current price levels: we should see a premium on XBTH18 and XBTM18 of $640 and $1,450 respectively.

Hence, a trader looking to BTFD on Bitcoin, who believes that the basis should revert to its historical average, could then see additional gains of $540 to $650 on the fixed-date products. Happy trading!