Mark Dow, a former economist at the International Monetary Fund (IMF) who manages a family office in the US, has recently closed a bitcoin short he opened back when bitcoin futures started trading late last year, when the cryptocurrency was at its all-time high near $20,000.
On Twitter, Dow revealed he’s done with the bet against bitcoin, and that in the future he doesn’t plan on taking a long or short position.
— Dow (@mark_dow) December 18, 2018
When contacted by Bloomberg Dow added that he’s “done” with it and doesn’t “want to try to ride this thing to zero.” Per his words, he isn’t looking “to squeeze more out of the lemon,” and doesn’t want to think more about it – it just felt “like the right time.”
Dow further revealed that throughout the year he took profits twice, before closing his position. Since he opened it, bitcoin dropped from its all-time high to a little under $3,200 before starting to recover.
Using Dow’s tweet as a reference, he closed his short position as bitcoin rose to about $3,500. At press time, the cryptocurrency has already risen another 9.4% in the last 24-hour period, meaning it’s trading at $3,850.
Referring to last year’s bull run, which saw BTC go from about $1,000 to its all-time high, he noted many don’t understand its underlying blockchain technology, but merely “saw it was going up and wanted a piece of it.” He added that people’s imaginations can go wild when they “don’t understand the issue,” and that this allowed “the bubble to be much larger and much more violent.”
He added that he saw the psychological hallmarks of what was going on, and realized a point came in which it “looked like the fever was breaking.” This year, regulatory setbacks and the BCH hard fork pressured the crypto’s price further.
People buy into these assets because they believe the narrative, and you look at the asset prices to see if the narrative is weakening or changing. It’s not easy — you could be wrong, but that’s the sign you look for. But it doesn’t mean you’ll get it right.
Notably, Dow’s short was closed as some analysts start pointing out now may be a good time to buy crypto. As covered, Spencer Bogart, a partner at the crypto-focused venture capital firm Blockchain Capital, has recently said this may be a “great buying opportunity.”