Where are Bitcoin bulls making leveraged bets?
BTC Beta. The Bitcoin halving is coming up on Saturday, April 20, but for crypto enthusiasts, holding Bitcoin is far from an exciting activity! What can you do to gain high beta exposure to BTC ahead of this event and potentially capture enhanced upside (or downside)?
Historically, Bitcoin halvings have coincided with significant price increases in Bitcoin as the inflationary block reward reduction reduces selling pressure from miners and allows Bitcoin to enter price discovery mode.
Many cryptocurrency traders expect this year’s halving to produce similar results, but are unhappy with Bitcoin’s relatively modest returns. For them, higher-beta alternatives enhance volatility while offering the opportunity to continue holding spot crypto assets, removing the complexity of leverage and liquidation risk.
For those with large sums of money willing to hold more illiquid instruments, investing in popular Bitcoin Ordinals, including Bitcoin Puppets and NodeMonkes, could yield outsize returns if Bitcoin declines after the halving.
Ordinals NFTs are denominated in BTC, which means their USD price will rise as BTC surges, and rising BTC prices may attract more investors to buy them to capture a larger share of price increases.
Runes is a new token standard that will be launched at the time of the halving and will likely replace BRC-20 as the chain’s official fungible token standard, but given that the standard has not yet been launched, the enthusiasm may still be in its early stages.
While the first Runes haven’t been released yet, that hasn’t stopped traders (and developers) from trying to capitalize on the hype!
Runestones, a $112k Ordinals NFT collectible launched in March, capitalized on the momentum of Runes not only because of its similar name, but also because its developers promised holders would receive at least 3 different Runes Meme Coin airdrops.
One of the most popular liquid tokens currently offering upside exposure to Runes is PUPS, a memecoin based on but not affiliated with the popular Ordinals NFT project Bitcoin Puppets.
Currently, PUPS is based on the BRC-20 standard, but recently announced that it will transition to the Runes standard, which has caused the token price to increase by nearly 100% and has many traders excited that the token can continue to rise after the halving.
PUPS tokens are not only available on Bitcoin, but also provide a bridge on the Solana network, which is undisputedly the most popular chain for memecoin transactions.
Alternatively, some degens may choose to stick with something relatively classic and instead parody the original Bitcoin meme token: ORDI. Notably, attention appears to be shifting toward newer projects, with ORDI down more than 40% in April.
Bitcoin’s use case is still immature, but for investors who prefer infrastructure with a degree of infrastructure, Bitcoin L2 solutions like Stacks Network (STX) or bridging infrastructure like Multibit (MUBI) remain viable options to take advantage of the growing attention that may flow to Bitcoin after the halving.
While Bitcoin miners have historically provided more upside to Bitcoin, they may find themselves struggling post-halving after their revenue is cut in half, so investing in their shares may be best avoided both before and after the halving.
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