HODL: Tom Lee Reaffirms BTC's Full-Year Gains Are Generated in Only 10 Days

Francisco Memoria

Tom Lee, the head of research at Fundstrat Global Advisors and a well-known bitcoin bull, has recently reaffirmed that his research has shown bitcoins’s full-year returns are generated in only 10 days, hinting that HODLing makes sense.

On social media, Lee referenced this week’s crypto market rally, Lee noted that it can serve as a reminder that bitcoin, the flagship cryptocurrency, has historically generated its annual gains in 10 days.

Lee’s research was initially revealed last year, and it showed that, since 2013, the flagship cryptocurrency needed only 10 days or less to see its full-year returns. At the time, Lee used 2017 as an example, noting then “a total of 12 days” represented the cryptocurrency’s full-year return.

According to the Wall Street analyst, if an investor didn’t hold on to stocks through the 10 best days for the S&P 500 each year, his annualized return would drop from 9.2% to 5.4%. Comparatively, if an investor doesn’t hold BTC for its top 10 days, his annualized return would drop to -25%.

Lee’s recent tweet came as a reminder the HODLing makes sense for those investing in BTC. In the last few days the flagship cryptocurrency has been seeing its price rise significantly, so much so it’s up 41.3% in the last 30 days, according to CryptoCompare data.

What’s behind BTC’s price surge is unclear, although some analysts believe various factors could be involved. The cryptocurrency last month saw a ‘golden cross’, and Fidelity Investments is reportedly going to “buy and sell” the crypto for institutional clients in the next few weeks, showing technicals are improving, as well as adoption.

Tom Lee is a notable bitcoin bull as he’s made various bullish predictions regarding the cryptocurrency’s future price. Last year, he predicted it would hit $25,000 by the end of 2018, and that it would hit $91,000 by March of 2020.

Bitfinex Wants to Offer 100x Leverage For Crypto Derivatives Trading

Michael LaVere
  • Bitfinex will offer 100x leverage trading for cryptocurrency derivatives
  • According to the exchange's CTO, the hedging product is "ready for prime time"

Cryptocurrency exchange Bitfinex revealed it wants to offer derivatives products with up to 100x leverage for cryptocurrency traders. 

Hedging On Cryptocurrency Derivatives

Chief Technology Officer Paolo Ardoino told The Block on June 25 that the cryptocurrency exchange was ready to ship a 100x leverage product for certain users. According to the post, the project has been under development for some time and is “now ready for prime time.” 

The product was referenced in last month’s whitepaper published by Bitfinex for its $1 billion private token sale of LEO, stating

“Qualified Bitfinex account holders will be able to trade a new hedging product through a derivatives wallet.”

The whitepaper originally claimed that the new hedging mechanism would be released by the end of June, a timetable that fits with Ardoino’s “ready for prime time” statement. 

Ardoino confirmed that only “verified” customers will be allowed access to the product, given the risks involved in such highly leveraged trades. 

The CTO also took to Twitter to quell user concerns over Bitfinex’s existing 3.3x margin trading. Ardoino explained 100x leverage will be “optional,” and that their current leveraged trading products will be unaffected by the release. 

Big Risk, Big Reward

Bitfinex is looking to compete with rival exchange BitMEX, who already offers 100x leverage through its bitcoin perpetual swap contract. However, Bitfinex claims its product is designed as a legitimate hedging tool for clients, rather than a gambling mechanism. 

Max Boonen, CEO of trading firm B2C2, believes the product will only appeal to retail hedgers, as large investors will shy away from the risks involved in 100x trading. 

According to Boonen, 

“There’s nothing wrong inherently about 100x. But as a commercial hedger you want lower leverage margin. The larger investor wouldn’t want to take the risk of 100X, typically. They don’t want to go balls to the wall.”

The cryptocurrency derivatives market has been heating up. Last week bitcoin-bull Mike Novogratz’s Galaxy Digital announced plans to offer cryptocurrency options contracts.

Binance has also reportedly been exploring futures trading. On June 24, Binance CEO Changpeng Zhao tweeted the exchange had executed its first margin liquidation for a BTC short.