Facebook (Peak Centralization) vs Bitcoin (Decentralization)
Here's a trade idea that might be interesting. Although I may also be late to the game as both assets have moved considerably the last week or so. Maybe wait for a better set-up, but the idea is short Facebook and long Bitcoin.
What the heck?
Who would do that?
What's interesting about this trade is peak centralization and peak decentralization are head to head. Facebook connected the world, which was great. But along the way they harvested and stored a lot of data. They serve ads based on interests and browser history. You get the idea - they are famous for their centralized data. Meanwhile, Bitcoin is essentially the complete opposite. It's moving away from centralization. The focus is to decentralize. Complete freedom and privacy to do what you want. The chart above shows the formula BTCUSD/FB.
Another fun tidbit about this story: the Winklevoss are arguably the ones who started Facebook. Later on, as the story goes, Zuck stole the idea and ran with it. They've settled their differences in court. Nonetheless, it adds an even more interesting development to this idea because now the Winklevoss are some of the biggest Bitcoin hodlers. Almost 15 years later, they might be having the last laught.
So there you have it.
An epic pair trade.
Long Bitcoin and Short Facebook.
It needs a good nickname. Feel free to comment.
By the way, I would not naked short Facebook in this trade. I would wait for a better entry and aim to buy some put options maybe 30 to 60 days out. Long Bitcoin. And then continue adding to the options position if it keeps hitting. Another thing to keep in mind is that Facebook has been a very strong name. It also has a ton of cash on its balance sheet. So it would take a lot to move it any lower. Slow down in user growth or ad growth could do that. Let's see.
Thanks for reading
What the heck?
Who would do that?
What's interesting about this trade is peak centralization and peak decentralization are head to head. Facebook connected the world, which was great. But along the way they harvested and stored a lot of data. They serve ads based on interests and browser history. You get the idea - they are famous for their centralized data. Meanwhile, Bitcoin is essentially the complete opposite. It's moving away from centralization. The focus is to decentralize. Complete freedom and privacy to do what you want. The chart above shows the formula BTCUSD/FB.
Another fun tidbit about this story: the Winklevoss are arguably the ones who started Facebook. Later on, as the story goes, Zuck stole the idea and ran with it. They've settled their differences in court. Nonetheless, it adds an even more interesting development to this idea because now the Winklevoss are some of the biggest Bitcoin hodlers. Almost 15 years later, they might be having the last laught.
So there you have it.
An epic pair trade.
Long Bitcoin and Short Facebook.
It needs a good nickname. Feel free to comment.
By the way, I would not naked short Facebook in this trade. I would wait for a better entry and aim to buy some put options maybe 30 to 60 days out. Long Bitcoin. And then continue adding to the options position if it keeps hitting. Another thing to keep in mind is that Facebook has been a very strong name. It also has a ton of cash on its balance sheet. So it would take a lot to move it any lower. Slow down in user growth or ad growth could do that. Let's see.
Thanks for reading
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Read my blog here: scheplick.com
Follow me on X here: x.com/scheplick
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