Bitcoin crashes, just like I said would happen.
2.5 months ago, around mid-June 2025, I changed my ‘Bitcoin shorting method’ to short Bitcoin 24-7 instead of only during market hours. This was a radical overhaul of my method, as the old method had stopped working as well for hedging. During the Trump ‘liberation day’ selloff, my hedging method had not worked as well as I had hoped, so I changed it to short Bitcoin continuously, writing:
Same for shorting Bitcoin. My previous method involved shorting during market hours, but I have modified it to short continuously, without the specified window. This way I am able to hedge any bad Middle East news as it arises. But if the stock market surges, Bitcoin will lag on the upside, so I come out ahead either way. Bitcoin has lagged QQQ. This is much better than prediction markets, in which I have no edge. With my method, I cannot lose unless Bitcoin exhibits a lot of strength relative to tech stocks, which is short-lived and uncommon anyway.
This was as the war with Iran was unfolding. Shorting Bitcoin is the ultimate hedge compared to alternatives. As we saw in 2022-2023, bonds fail as a hedge during high inflation. Gold is also unreliable, as also seen in 2022. Put options decay too much. Shorting equities is also inconsistent. Shorting Bitcoin however provides high beta to downside, and much less beta on upside. It also randomly dumps, like we saw over the past 3 months, so that means an easy 4% in a day in a flat market. Bitcoin is much more sensitive to the downside on macro risk, headline risk, or anything else that is bad.
As shown above, as indicated by the red box is when I changed my method. You can see how Bitcoin is flat since then, but tech stocks, as indicated by the blue line, are up 10%. Because I am using leverage, my returns are much greater. Meanwhile, all the downside was hedged.
So why has Bitcoin been so weak? Two big reasons.
First, the U.S. officials dismissed the possibility of buying Bitcoin to find the reserve. This was much worse news than originally assumed and in retrospect will been seen as the catalyst that likely popped the Bitcoin bubble for good. Trump will have profited while people who bought in lose. I was also right about the reserve not happening.
Trump knows that a taxpayer-funded Bitcoin reserve would be political suicide, being seen by the broader public as a bailout for speculators. At least the partial Intel acquisition represents an actual company with products. The Intel brand is still iconic and the public thinks favorably of it.
The usual irrelevant pundits are whining about ‘socialism’ or overreach. No one care what those people think, even if you think the Intel purchase was a bad idea. Their opinions have been irrelevant forever and their protestations still fall on deaf ears. As seen in 2008-2009, it’s not unpresented for the US to take partial or even total ownership of struggling companies in certain extreme cases. It is not a harbinger of socialism as commonly predicted, but rather more of a one-off event. The 2008 bailouts similarly did not lead to socialism despite many predictions otherwise. You can see how the private sector has thrived since 2008, whether in tech, housing or retail. True, one can make an argument that the U.S. is ‘picking winners and losers’, but this again is also not new. Any government policy will have winners and losers.
Second, all capital is flowing into AI, as I also said last week. Trump also knows AI is the real winner, not crypto:
The second system is how all capital is flowing into AI. China’s DeepSeek has led to a global AI arms race. No money is flowing to crypto anymore compared to AI. This is also why Bitcoin has done so poorly in recent months and will keep falling. Trump, being as competitive as he is, does not want to lose this race, so he’s putting crypto on backburner and focusing on AI. You can also see this in the divergence between QQQ and NVDA vs Bitcoin’s price.
I was able to anticipate this as well. Trump knows AI is the key to American competitiveness, not crypto.
It’s one thing to get a few things right, but to create a panorama of everything that unfolds and then profit from it, is at another level. By having one of the highest IQs I was able to figure this out. Even Trump said the ability to predict thefuture is the ultimate sign of intelligence.
If this is not enough evidence there is also the math research, but that is not profitable.