Market update for 2024: a huge start for the year, Bitcoin crashes, and optimism about Trump

2024 is off to a stronger start than even 2023. Everything is going exactly as predicted. It’s one thing to get the general direction right or one or two things, but not everything. Below, META and SVIX, the two I singled out at the start of the year as superstar performers, are up about 8% for 2024 so far, compared to 3% gains for the QQQ. And a huge decline for Bitcoin, too, as also predicted:

Note: This is from yesterday’s close, 1/23/2024. The Nasdaq is up even more as of posting this. This implies that the 3x leveraged tech funds, TECL and TQQQ, have absolutely murdered Bitcoin for 2024 so far. Another correct call.

The stock market, especially big tech, is overwhelmingly optimistic about Trump, due to the promise of lower taxes, deregulation, and increased government spending. I cannot be more bullish about the stock market than I am now (the market did very well under Trump’s first term despite predictions by the always-wrong media about crisis and recession). Trump expanded the balance sheet greatly in 2020 during Covid, with no resistance from otherwise deficit-skittish Republicans, so expect the same again.

Trump’s fiscal policy is as expansive as Biden’s, maybe even more so, so there is no reason to expect inflation to subside much. Tax cuts tend to be inflationary, as they are good for growth compared to most other forms of government spending (the way we can know this is by tracking how the stock market responds in real-time to tax cuts, which is favorably, suggesting they are good for growth). Trump was much more concerned about the stock market than about inflation, tweeting about the new highs for the market constantly during his first term. He’s not going to sacrifice points of the DJIA or percentages of GDP to make groceries more affordable, sorry (not that many of the people on Twitter who worried about inflation now are going to still care if Biden is gone).

Trump will fall short of the hopes of his far-right base, by appointing ‘status quo’ people to important positions, similar to his first term. All of this, of course, is assuming he wins. There will be little to no additional regulation of trade under Trump either despite the usual saber-rattling against China. This is similar to failed promises of cracking down on tech censorship during his first term (whatever happened to that proposed TikTok ban in 2020? Nothing). The political will does not exist anymore, and attempts at weakening Section 230 will fail in the courts anyway.

Bitcoin is doing so poorly in large part because the largest holder, Grayscale, is unloading on the public to the tune of $500 million Bitcoin per day after the ETF conversion process. So far over $3 billion has been sold, with $22 billion more to go.

As for the trading method, it’s up 5% so far for 2024:

(note: this is many days old, closer to 7%) 7% may not seem that great, but with leverage it’s closer to 12% and this is just for 2/3 of January. It can easily be much higher by year’s end at this rate. The idea is I am able to isolate the timeframe for which shorting Bitcoin is consistently profitable, so I don’t lose money even though Bitcoin is up 150% over the past year. I can run this whilst being long tech by using the long positions as collateral against the short leg. So it generates alpha both from the short gains and as a hedge.