A major part of IQ is the ability to anticipate or adapt to a changing environment. I am able to take advantage of the tendency of BTC to fall randomly or along with the stock market, but not participate on the upside. This makes shorting perfect for hedging in the event of bad news, like tariffs or Middle East conflict, so I am always covered. I don’t have to worry about being caught off-guard. I cannot lose unless BTC goes up a lot relative to tech stocks, which seldom happens.
Recall many weeks ago I modified my method to short BTC continuously instead of only in a certain window. The older method had stopped working as well, so I changed it. On 6/17 I wrote:
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.
After Trump entered office we entered what I described as a ‘doom loop‘ of the same stories recurring, typically during the weekend or overnight, like tariffs news or the Middle East. This required having to change my hedging method to short Bitcoin 24-7, which has worked great. Last Thursday night I was prepared when Trump dropped more tariffs, and I profited greatly after Bitcoin fell from $118k to $113k by Saturday. This hedged the concurrent decline in the stock market, so I came out ahead anyway.
I was also right about Meta stock going up, which surged 12% on Thursday on earnings to a record-high $780/share. This represented a quarter of my account size, so that was a nice payday.
As further evidence of superior forecasting skills, I was right about Trump punting on the Bitcoin reserve, as I predicted many times in early 2025 he would. The long-awaited White House crypto report omitted a key promise, that being any mention of a strategic Bitcoin reserve:
A senior Trump administration official confirmed Wednesday that the White House’s hotly anticipated crypto report, which is set to drop today, will not include any recommendations related to the federal government’s creation of a federal Bitcoin reserve or separate digital asset stockpile.
Despite the sprawling report being “over 160 pages long,” according to the official, and containing “dozens of recommendations” related to crypto policy, it will not touch on one of the Trump administration’s most high profile crypto-related goals: creating a strategic reserve of Bitcoin held in perpetuity by the federal government.
Moreover, as I warned weeks ago, old Bitcoin wallets are suddenly coming to life and dumping. People greatly overestimated how many lost Bitcoin. If someone was smart enough to mine or otherwise obtain 1000s of BTC in 2010-2011, they are not going to lose the keys. Even as far back as 2011, a thousand Bitcoin was still worth thousands of dollars. It was not a trivial amount of money, so it was not the sort of thing I can imagine someone losing due to carelessness.
The objective of a hedge fund is to optimize risk-adjusted returns and to protect capital under unpredictable market conditions, typically by diversifying among many uncorrelated assets. Finding the optimal combination is a daunting problem as there are many possible permutations. Hedge funds have huge staff and pay 7-figure salaries to find risk mitigation strategies that still preserve gains. I intuited the correct strategy of just shorting Bitcoin all along on my own without any staff.
This is more evidence of how IQ is invaluable for success. It also answers the question, “If you’re so smart, why aren’t you rich?” IQ does not scale linearly, nor is it additive. Someone with an IQ of 150 is not 25 percent smarter than someone with a 125 IQ; it’s exponential. Pooling many average-IQ people will never produce an epiphany of a single high IQ person. Brute forcing does not work in this instance because you still need to know where to look in order to limit the search space to something that is tractable, and this is only possible if someone has the map. This is how it’s possible for someone with an IQ of >150 to outsmart an entire team of people with IQs of 120-130.