On January 17, 2025, I made the decision to double our Bitcoin holdings for the Terramatris Crypto Hedge Fund, bringing our total position to 0.02 BTC. This purchase was financed using margin on the ByBit platform, aligned with our strategy to accumulate at least 0.05 BTC by the end of 2025. With 0.03 BTC to go, this move marks another step toward our goal.
As part of this transaction, I simultaneously sold an in-the-money 1-day-to-expiration (1DTE) covered call option against the newly acquired position. Here are the details of the trade:
- Purchase of Bitcoin:
- Quantity: 0.01 BTC
- Price: $101,759.23 per BTC
- Sale of Covered Call Option:
- Expiration: 1 Day
- Strike Price: $101,500
- Premium Received: $1,190 (multiplied by 0.01 BTC, before commissions)
This combination of buying Bitcoin and selling covered calls not only reduces our cost basis through collected premiums but also provides a clear path for managing risk and generating consistent income.
Trade Strategy: Building the Position
This trade reflects a focused approach to expanding the fund’s Bitcoin holdings while maintaining cash flow. The short-term goal is to average down the buy price using premiums from 1DTE covered calls. Over time, this strategy should lower the effective cost of each Bitcoin purchased, regardless of short-term price fluctuations.
While the long-term plan is to hold Bitcoin and capitalize on significant price appreciation, we’re not ruling out the possibility of selling portions of the position in profit. For now, the priority is growing the fund’s holdings while managing risk with income-generating covered calls.
The Bigger Picture
At Terramatris, we believe Bitcoin could reasonably reach $1 million per coin in the future. If this happens, our current holdings of 0.02 BTC would translate to $20,000 in value. This outlook drives our strategy to accumulate and hold Bitcoin, while short-term tactics like covered call selling provide flexibility and income.
By the end of 2025, our goal is to increase the fund’s holdings to 0.05 BTC. Every trade, including this one, plays a part in achieving that milestone.