I setup a long BTC / short alts strategy on a small sub-account as an experiment and it looked like that

- Long BTC leg around 2x larger than the shorts => I started with 1.5x but that's clearly too low imo

- Short more than 100 alts (so very diluted shorts), with almost all of them being sub $1bn FDV

- I doubled down on some of the shorts when the alts started moving up in early May, which is probably not a good idea because I often doubled down way too early on altcoins that ended up being the top performers (ex: GOAT, PENGU, PNUT). This means that the shorts with the most size were also the shorts pumping the most, increasing the negative uPnL a lot on these.

- This previous point leads me to think that keeping equal size (or close to) on most shorts and not adding on the ones that pumped the most is probably a better strategy. Losers remain losers.

- You can see that the drawdown in May was pretty brutal, but it's been very smooth since then. Finding how to reduce this drawdown is key.

Crypto Narratives

Crypto Narratives

I still haven't found an evergreen way to express the long $BTC / short altcoins trade without taking the risk of a substantial drawdown on these moves

I setup a long BTC / short alts strategy on a small sub-account as an experiment and it looked like that

- Long BTC leg around 2x larger than the shorts => I started with 1.5x but that's clearly too low imo

- Short more than 100 alts (so very diluted shorts), with almost all of them being sub $1bn FDV

- I doubled down on some of the shorts when the alts started moving up in early May, which is probably not a good idea because I often doubled down way too early on altcoins that ended up being the top performers (ex: GOAT, PENGU, PNUT). This means that the shorts with the most size were also the shorts pumping the most, increasing the negative uPnL a lot on these.

- This previous point leads me to think that keeping equal size (or close to) on most shorts and not adding on the ones that pumped the most is probably a better strategy. Losers remain losers.

- You can see that the drawdown in May was pretty brutal, but it's been very smooth since then. Finding how to reduce this drawdown is key.

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4.55K viewsJun 15 at 10:43