If you’re so sure interest rates will go up, why settle for ~10% returns when there are Bitcoins (and many other assets including stocks) you can short?
Because that’s a way more specific bet depending on other factors (e.g. inflation, other factors influencing Bitcoin demand). Rising (real) interest rates seems way more certain to happen than rising prices of any given company, especially considering most of the companies pursuing AGI are private.
I’m not sure where the 10% returns come from, but you can make way, way more than that by betting on rising rates. For example, you can currently buy deep OTM SOFR calls expiring in 3 years with a strike on 100bp for 137 dollars. If I understand the pricing of the contracts correctly, if quarterly rates double from 1 to 2%, that would represent a change of $2500 in the price of the contract, so a 17x return.
Because that’s a way more specific bet depending on other factors (e.g. inflation, other factors influencing Bitcoin demand). Rising (real) interest rates seems way more certain to happen than rising prices of any given company, especially considering most of the companies pursuing AGI are private.
I’m not sure where the 10% returns come from, but you can make way, way more than that by betting on rising rates. For example, you can currently buy deep OTM SOFR calls expiring in 3 years with a strike on 100bp for 137 dollars. If I understand the pricing of the contracts correctly, if quarterly rates double from 1 to 2%, that would represent a change of $2500 in the price of the contract, so a 17x return.