{"id":4290,"date":"2025-04-26T04:11:11","date_gmt":"2025-04-26T04:11:11","guid":{"rendered":"https:\/\/bitcotasks.com\/blog\/bitcoin-trades-at-40-discount-as-triple-put-unfolds-hedge-fund-founder\/"},"modified":"2025-04-26T04:11:11","modified_gmt":"2025-04-26T04:11:11","slug":"bitcoin-trades-at-40-discount-as-triple-put-unfolds-hedge-fund-founder","status":"publish","type":"post","link":"https:\/\/bitcotasks.com\/blog\/bitcoin-trades-at-40-discount-as-triple-put-unfolds-hedge-fund-founder\/","title":{"rendered":"Bitcoin Trades At 40% Discount As \u2018Triple Put\u2019 Unfolds: Hedge Fund Founder"},"content":{"rendered":"

Bitcoin is changing hands at prices almost 40% below its modeled \u201cenergy value,\u201d yet an unusual confluence of technical, fundamental and policy signals suggests the market may be turning, according to Charles Edwards, founder of the quantitative crypto hedge fund Capriole Investments. In his latest newsletter<\/a>, Edwards argues that a newly-formed \u201cTriple Put\u201d\u2014simultaneous backstops from the White House, the Federal Reserve and the US Treasury\u2014has altered the risk profile for all risk assets just as on-chain and macro indicators for Bitcoin flip decisively higher.<\/p>\n

Bitcoin Flips Bullish<\/h2>\n

Edwards begins with sentiment, describing it as \u201cin the pits.\u201d The American Association of Individual Investors\u2019 bull\u2013bear spread, he notes, is \u201cas bearish as 2009 and the 2022 lows, and significantly worse than the 2020 Covid crash,\u201d even though both Bitcoin and the S&P 500 have fallen less than fifteen percent from their recent peaks.<\/p>\n

The CNN Fear & Greed Index has registered its bleakest reading \u201cin years,\u201d while Capriole\u2019s own Active Manager Sentiment gauge shows equity managers at near-record under-exposure. \u201cSimply put, investors are panicking today,\u201d he writes, warning that such extreme readings \u201ctypically coincide at the mid-late stage of a major price bottom.\u201d The combination leaves what Edwards calls \u201cblood (and fear) on the street,\u201d echoing the Rothschild maxim he cites in full: \u201cthe time to buy is \u2018when there\u2019s blood on the streets, even if the blood is your own.\u2019\u201d<\/p>\n

Technically, Bitcoin staged a sharp reversal just days ago. A breakout candle to $94,000 reclaimed the entire $91,000\u2013$100,000 range that had capped the market since February. Edwards classifies the move as a \u201csignificant range reclaim,\u201d adding that \u201cfor Bitcoin, such bullish range reclaims rarely see price look back.\u201d<\/p>\n

\"Bitcoin<\/p>\n

Unless the market delivers \u201ca daily close under $91K,\u201d he writes, \u201cit\u2019s hard to get a technical chart more bullish than this.\u201d The breakout coincides with his firm\u2019s machine-learning fundamentals model, the Bitcoin Macro Index, turning positive after months in neutral territory. The index blends more than seventy on-chain, macro-economic and equity-market variables; price is deliberately excluded to avoid feedback effects. Last week the model \u201creset to \u2018fair value\u2019 and then resumed a bullish trend,\u201d a shift Edwards calls \u201ca very promising fundamental data reading.\u201d<\/p>\n

The ‘Triple Put’<\/h2>\n

Policy developments provide the third leg of the story. On April 2\u2014the so-called \u201cLiberation Day\u201d\u2014the United States imposed sweeping global tariffs, only to halve them and add a 90-day pause once equities sold off by roughly fifteen percent, the VIX jumped above 30, and credit spreads widened.<\/p>\n

Edwards describes the rapid reversal as the inaugural \u201cTrump Put,\u201d evidence that \u201cif markets decline too much, Trump will step in, enact policy and backstop them.\u201d One day earlier, on April 1, the Federal Reserve began slashing the pace of quantitative tightening by 95% (the \u201cFed Put\u201d), effectively ending a four-year balance-sheet contraction; derivatives traders on the CME FedWatch tool now assign the base-case to three rate cuts before year-end.<\/p>\n

Meanwhile, Treasury Secretary Scott Bessent told reporters that the swoon in Treasuries was driven by deleveraging rather than foreign selling and that the department \u201chad tools to mitigate the situation, including scaling up buybacks if necessary\u201d (\u201cTreasury Put\u201d).<\/p>\n

Edwards concludes that \u201cwe now have three major financial market puts in place, all ready to backstop financial markets. Together the US President, Federal Reserve and US Treasury represent the Triple Put,\u201d a volatility backstop unprecedented in its breadth.<\/p>\n

Is BTC Undervalued?<\/p>\n

Capriole\u2019s own \u201cChart of the Week\u201d underscores the valuation argument. The Bitcoin Energy Value\u2014an in-house metric that prices the network using aggregate miner electricity consumption\u2014surged above $130,000 for the first time this month.<\/p>\n

With the spot market trading near $94,000, Bitcoin therefore sits at an \u201calmost 40% discount to fair value,\u201d a depth of undervaluation that Edwards calls \u201cquite rare\u201d in the first year after a halving and \u201ca very welcome sight.\u201d Historically, the energy value has acted as a gravitational pull on price; gaps of this size have narrowed in every prior cycle.<\/p>\n

\"Capriole\u2019s<\/p>\n

Edwards tempers the bullish picture with caveats. \u201cPolitical and volatility risk remain, and new policy changes are the greatest risk to derailing markets at present,\u201d he writes, adding that Capriole will watch for Bitcoin to defend $91,000 on a weekly close and for the Macro Index to remain in expansion.<\/p>\n

Yet his overall tone is unmistakably optimistic: \u201cAs it sits today, the outlook for Bitcoin is very bullish with confluence across technicals, fundamentals and sentiment,\u201d he concludes. If the week ends above current levels, Edwards \u201csuspect[s] we will be pushing new all-time highs on Bitcoin quite soon.\u201d<\/p>\n

At press time, BTC traded at $93,723.<\/p>\n

\"Bitcoin<\/p>\n","protected":false},"excerpt":{"rendered":"

Bitcoin is changing hands at prices almost 40% below its modeled \u201cenergy value,\u201d yet an unusual confluence of technical, fundamental and policy signals suggests the market may be turning, according to Charles Edwards, founder of the quantitative crypto hedge fund Capriole Investments. In his latest newsletter, Edwards argues that a newly-formed \u201cTriple Put\u201d\u2014simultaneous backstops from…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[245],"tags":[65,111,108,73,112,113,463],"class_list":["post-4290","post","type-post","status-publish","format-standard","hentry","category-bitcoin-news","tag-bitcoin","tag-bitcoin-news","tag-bitcoin-price","tag-btc","tag-btc-news","tag-btc-price","tag-trump"],"_links":{"self":[{"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/posts\/4290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/comments?post=4290"}],"version-history":[{"count":0,"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/posts\/4290\/revisions"}],"wp:attachment":[{"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/media?parent=4290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/categories?post=4290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcotasks.com\/blog\/wp-json\/wp\/v2\/tags?post=4290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}