“Bitcoin is this unbelievably unparalleled asset, that respects your time spent, and your labour, and it puts it into this safe and growing in value bank in cyberspace as Saylor says. But you can screw it up if you lever it... levering Bitcoin literally inverts 180 degrees the way that Bitcoin otherwise respects your time.”
— Andy Edstrom

Location: Los Angeles
Date: Friday 4th February
Company: Swan Bitcoin
Role: Head of Institutional Investment

As with all assets and commodities, a myriad of financial instruments have been developed around Bitcoin. The riskier end of the spectrum are opportunities to take levered positions. These positions can produce stellar returns, providing opportunities for those who feel like they’ve missed out on previous bull runs, or have the appetite to try and continue to outplay the market.

If only it were that simple. Stating leverage involves risk is a massive understatement. You. Can. Lose. Everything. Liquidation is a brutal experience. The issue regarding Bitcoin is that liquidation of open levered positions is inevitable and rapid due to the volatility.

There are numerous stories of markets turning suddenly in unexpected directions, and exchanges being unable to deal with the associated demand to add collateral to open positions. Then there are flash crashes which occur too quickly for anyone to be able to respond. Fairness doesn’t come into the algorithms used to close positions and action liquidations.

Rekt is a term used too often. A simple mistake can undo years of hard work. Staking sats, hodling, and staying humble are the tried and tested ways of maximizing the opportunities provided by Bitcoin. Developing the discipline of having a long time preference is a cathartic experience.

In this interview, I talk to Andy Edstrom, author of Why Buy Bitcoin and Head of Institutional Investment at Swan Bitcoin. We discuss experiences of getting rekt, applying good leverage, the waves of Bitcoin adoption, playing offence on Bitcoin’s ESG credentials, and investing in Bitcoin for time and freedom.

This episode’s sponsors:
Gemini - Buy Bitcoin instantly
BlockFi - The future of Bitcoin financial services
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Ledger - State of the art Bitcoin hardware wallet
Compass Mining - Bitcoin mining & hosting
LVL - Bank on Bitcoin
BCB Group - Global digital financial Services

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WBD470 - Show Notes

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