Brexit Trade Analysis (BTC/USD)

Bitcoin Trading

Foreword: In this article I will explain in plain English, the trade I executed during the night of the final votes resulting in the United Kingdom leaving the European Union. Although there were many plays that one could have made that night to make money, this post will be focused on BTC.

Trade executed (via https://whaleclub.co/):

Brexit Trade

Analysis and Rationale:

During the final few days leading up to the referendum, odds heavily favored that the UK would remain in the EU.  Note the impact on BTC as it falls drastically until voting day (June 23).  During late hours of the night on voting day, the gap closes and official votes begin to put more favor towards exit than anticipated.  Note BTC begins to trade up and down through the night of the 23rd as votes are neck and neck between remain and exit.

BTCUSD Brexit

BTCUSD

As BTC has already priced in remain sentiment, and leave rapidly becomes a possible outcome, this presents an opportunity to long BTC.  Consider the two possible outcomes: 1) Remain wins out, and BTC possibly drops further, or 2) Leave wins, and money moves into BTC driving price up.

Late that night, as the votes are swaying back and forth between remain/leave, massive sells are put on the EU, with simultaneous buys on gold. The odds begin to drastically favor leave, and BTC remains largely unchanged.  At this point, we buy BTC at $641.19, with the assumption that BTC will soon catch up and follow gold as investors seek safe havens.

 

The referendum, which resulted in an overall vote to leave the EU, as opposed to remaining an EU member, by 51.9% to 48.1%, respectively lead to a rapid devaluation of the Euro and continued run up of gold, seeing roughly a~(4%) decline in the EURO and ~10% increase in Gold overnight.  Meanwhile, BTC rapidly appreciates hitting our $680 target on June 25th.

What did you guys think of this trade? What other factors were you considering? Comment below and lets discuss!

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