The once-vogue strategy of holding bitcoin overnight is losing its luster

The once-vogue strategy of holding bitcoin overnight is losing its luster

Those who follow crypto charts closely should know that a hypothetical strategy of buying Bitcoin at the close and selling at the next open has always produced excellent returns. But in recent weeks, there has been a blow.

According to Jake Gordon of the Bespoke Investment Group, the opposite of the so-called after-hours strategy, i.e. This has not been the case in the past, as most gains have generally been made outside of the normal trading hours in the United States, a phenomenon that market watchers have long observed and puzzled.

“Bitcoin and Ethereum price action turned into intraday strength after intraday weakness earlier this year,” Gordon wrote in a note. He added that it's hard to say why this might be happening, although the recent flurry of news that came out overnight may have something to do with it.

Crypto investors have been fascinated for years with how bitcoin and other digital assets are affected by news feeds or reduced liquidity as US markets – and traders – are closed and asleep. Bespoke previously noted that bitcoin tends to rise on weekends when the stock market is closed, but it trades flat Monday through Friday before US stock markets open, but drops once. let the exchanges begin.

It is remarkable that the long-dominant strategy has lost some of its luster. This could partly be explained by the fact that news flow has been strong over the past few weeks amidst the problems faced by various crypto companies, including hedge funds and lenders. "That tells me there's a lot of bad news ahead," said Matt Maley, chief market strategist at Miller Tabak. "Those making the announcements know that the crypto market is so fragile that they make all the announcements when the US markets are closed."

Still, the strategy of holding the coin only during the night phase would have generated a 134% gain since the end of 2019, according to Bespoke on Friday, while buying the open and selling the close generates a yield of 9%.

Related news
Over $4.7 million stolen in phishing attack on fake Uniswap token
Over $4.7 million stolen in phishing attack on fake Uniswap token
According to a Twitter announcement from Binance CEO Changpeng “CZ” Zhao, the strike caused at least $4.7 million in ETH to be lost.
GameStop launches NFT Marketplace public beta
GameStop launches NFT Marketplace public beta
GameStop, the American retailer of video games, consumer electronics, and gaming devices, has launched the NFT Store where gamers, creators, collectors, and others can buy, sell, and trade NFTs.
4 BIG REASONS to invest in Bitcoin today
4 BIG REASONS to invest in Bitcoin today
2020 is a year of bigger moves or trades for Bitcoin. Research shows that more and more people are getting bitcoin and the number of people responding to it is growing exponentially.
Crypto Firms Say Thousands of Digital Currencies Will Crash, Compare Market to Early Dot-Com Days
Crypto Firms Say Thousands of Digital Currencies Will Crash, Compare Market to Early Dot-Com Days
Several cryptocurrency industry players have told CNBC that thousands of digital tokens are likely to collapse, while the number of existing blockchains will also decline in the coming years.
How Shell is using Web3 and blockchain for sustainability and the energy transition
How Shell is using Web3 and blockchain for sustainability and the energy transition
Shell is one of the largest energy companies in the world. Although many of us associate it primarily with oil and gas, it has embarked on an ambitious energy transition program to shift from the use of fossil fuels to green and sustainable energy.