Cash for (Digital) Gold
Welcome to the Schmoozeletter Blog. Your source for weekly water cooler wisecracks from the world of finance. If you have an opinion different than mine or a topic you want to hear about, let me know!
This week, we’re talking about:
Cash for (Digital) Gold
If you know me, you know I love all of God’s creatures. Even the poor, misguided cryptonians.
And today, I extend the olive branch to the cold souls shivering from their losses due to the most recent:
CRYPTO WINTER
The sun is distant. The nights are long. And the worst may be yet to come…
Can someone send in the crypto groundhog?!
But anyway, a crypto olive branch.
You’re a believer. You don’t care what I say. I’m a decel maxxing newb who doesn’t get it. Bitcoin is going to the moon, and I’ll be stuck on earth like the portly fiat bro Keynesian cuck that I am.
Fair enough.
Rude.
But fair enough.
Let’s say you are correct.
Let’s say Bitcoin is going to rise from the dredges of this crypto winter and soar to ever-growing heights.
The problem has always been:
When do you sell?
Answer: never.
Okay, then when do you, uh, use your digital gold?
When does Bitcoin turn into something that you want? Like groceries or a house?
(That generally involves selling BTC for USD and then using USD to buy the house, but I digress.)
Answer: never sell. Diamond hands.
Cool. Cool. Cool. But you see this no-coiner’s conundrum.
So maybe I have a solution for us.
Did you know there is a fund where you can get:
Cash for (Digital) Gold
I’m talking real cash, I’m talking real dough.
Did you know there is a fund where you can get monthly cash distributions of United States Dollars, as long as the price of Bitcoin keeps rising over time?
Enter:
BTCI - NEOS Bitcoin High Income ETF
Want those actual, real, hard, dirty fiat bucks in a form that just so happens to be the only way your stupid landlord will take the rent?
BTCI pays it every month.
Want cash in your pocket that you can take to the casino?
BTCI pays it every month.
Want dollars that you can pull out of the bank and take cool Instagram pics with?
BTCI pays it every month.
Cold. Hard. Tangible. Cash.
But there is a catch.
The price of Bitcoin needs to be going up.
Here is what BTC has done the past year.
It is down 31%.
And here is what the total return of BTCI has done the past year.
The total return is down 26%.
Notice how there are two lines. The price return, down 46%, means the price of the stock is 46% lower than a year ago.
And the total return, meaning the stock price plus those sweet, sweet cash payments coming in every thirty days.
Again, if BTC is declining…
Those cash payments will be declining.
But from what my cryptonian friends have told me, this is the bottom!
BTC will go up to the moon from here.
If so, then it is the perfect time to buy BTCI and get:
Cash for (Digital) Gold
BTCI is a covered call fund, meaning they sell options and blah blah blah. That is a whole other Schmoozeletter in itself.
The two important things to remember with quality covered call funds, and most aren’t quality, are that:
1. The underlying asset needs to be going up.
2. They won’t outperform the underlying asset.
So in this case, BTC needs to recover. Otherwise, BTCI will eventually go down with it.
Also, if BTC goes to the moon, you will get a higher total return from Bitcoin than from BTCI.
With covered call funds, you sacrifice return for yield. You give up growth for cash. You sacrifice…
With covered call funds, your total return will be coming from monthly cash payments, not from the fund price going up.
So if you love sipping the Jonestown Bitcoin Kool-Aid but also live in our society where we use actual USD for everything, maybe BTCI is for you.
They do say Bitcoin is digital gold…
If so, than BTCI gives you:
Cash for (Digital) Gold
Final Thought
The king never misses.
