Best Bitcoin and Ethereum Strategy in 2022? This report answers
Bitcoin and Ethereum remain stuck in a range with no clear direction during today’s trading session. Crypto market uncertainty has crushed long and short positions, but one sector is thriving under current conditions.
At the time of writing, Bitcoin is trading at $19,360 with sideways movement across the board. Ethereum is showing similar price action in this choppy environment, with most cryptocurrencies in the top 10 showing losses or sideways movement.
2022 crushes Bitcoin and global markets
According to a report from trading desk QCP Capital, this year has been the worst performance for investors with a cross-asset portfolio. If an investor owned Bitcoin, stocks and gold as part of their strategy, their capital would be in the red.
As shown in the chart below, the only assets posting gains are those in the energy sector, with crude oil and natural gas leading the way. The former had the best performance in 2022 with a positive 34%, followed by 4% in crude oil (WTI).
The crypto market has been the biggest loser in current macroeconomic conditions. Bitcoin and Ethereum recorded 66% and 72% losses respectively. In traditional markets, only the Nasdaq 100 registers a corresponding decline of 40%. QCP Capital wrote:
Outside of energy, the breadth and correlation of underperformance is striking – every single macro-financial benchmark is underwater in real terms (…). Today, with all categories of bonds offering negative real returns – there was essentially nowhere you could have hidden away this year and beaten inflation.
In this environment, Bitcoin investors and traditional investors suffered the most insignificant losses by preserving their capital in US dollars. The currency hit its highest level in 20 years, as measured by the DXY index (DXY), causing havoc among other assets and national currencies.
The only safe haven for BTC and ETH investors
Despite the bear market, the options sector is booming, with its high adoption levels. Institutional investors recognize that BTC and ETH have perpetually speculative markets that drive key option calculations to new heights. QCP Capital added:
(…) crypto options and open interest (OI) trading volumes have held up so well this year, amid a crypto winter that has seen volumes in other crypto asset classes fall between 70-90%. In Q3, ETH options OI actually broke their all-time highs! While BTC OI has held up relatively well as well.
In this choppy and unclear market, smart money is betting on volatility spikes and premium collection in the options sector. The trading firm claims that even “vanilla” strategies managed to turn a profit under these conditions.
The status quo in global markets is poised to persist, allowing options traders to preserve their advantage amid upcoming volatility from macroeconomic events.
