Regarding the Trump crypto reserve, that too is setting up to be a major disappointment. I contemplated increasing my Polymarket bet against the Bitcoin reserve happening, but the terms of the contract are not clear enough. A ‘Bitcoin reserve’ can mean many things, and when a lot of money is at stake I want to get the terms down exactly, which is not possible with Polymarket when the terms are so vague. However, I am short Bitcoin now as per my method, having shorted at $105k on Sunday and up a lot.
In order of probability from increasing to decreasing of what can happen:
1. After delay, Trump enacts some executive order regarding crypto, but it’s not a reserve and it does not halt the sale of Silk Road or other government-seized coins. Or Trump does nothing–no executive order regarding crypto. I would put the combined odds of either of these at 90%. In either case, Bitcoin crashes.
2. Same as above by less delay, within a week or so. Bitcoin crashes, because it’s not a reserve.
3. Trump enacts an executive order for a reserve but does nothing about the sale of government-seized coins, which will continue to be sold. Market reaction is mixed, may sell on news.
4. Same as above, but also halts the sale of government-seized coins. This will come later, maybe within his first 100 days.
5. Same as above, and also pushes for legislation for the creation of a reserve. Very improbable. This will also come later if it happens,
maybe within his first year. Maybe a 1% chance.
6. The legislation passes, the reserve is signed into law so it outlives his term, and the government-seized Bitcoin are transferred to the reserve. Extremely improbable, about 0% chance.