This week, Keith McCullough, CEO of risk management firm Hedgeye sold off all of his Bitcoin. Today, he explained why. “It’s not personal,” he said in a blog post. It’s just “RoC Empirics.” Duh! (RoC means return on capital. Empirics mean math).
He said it’s a combination of…who knows. McCullough’s answer as to why he claims to have sold his Bitcoin—how much is unclear—is difficult to parse and appears as vague as any YouTube crypto trader who searches for “Bart Simpson haircuts” and “Golden Triangles” in price charts.
(McCullough’s firm, however, claims to advise risk managers with over $1 trillion of assets under management. It is unclear in what capacity and whether this simply refers to subscribers of his newsletter.)
But here’s a rough translation. He says he sold his Bitcoin for a combinations of “A bearish @Hedgeye TRADE breakdown” and “Rising probability of #Quad4 in Q4.” A breakdown is an explanation and Quad4 is a term invented by Hedgeye. It means that economic growth and inflation are slowing down. Quad4 is bad, and Bitcoin’s price is Quad 4.
This “makes it an easy A/B Tested decision,” or a decision, “to sell some, then sell all.” He says, “Other than Hedgeye Equity, my Real Estate, Wine, and Venture Capital investments, I am not a buy-and-HODLer.” This means that apart from the things Mccullough holds onto, McCullough doesn’t hold onto things. And Bitcoin isn’t on the list.
McCullough continues, “If that empirical fact or my decision to de-gross and/or sell affects you emotionally, you should really consider why that’s happening to you. When I sell something for a big gain, the only feeling I have is that I am going to pay taxes.” This means that if McCullough has upset you, it’s your fault and he’s rich and doesn’t care.
I expected more of #Bitcoin Nation. I thought they did math. They do narratives and emotion
— Keith McCullough (@KeithMcCullough) October 8, 2020
Then, “if Gold and Bitcoin continue to correct in price (they’re already in motion on that since I made my sales), there are no rules in my Full Cycle Investing accounts that say I can’t buy them back.” This means that if Bitcoin’s price increases, McCullough will buy it again.
Of course, only “when my dynamic rate-of-change model signals to do so in the right Quad.” We have no idea what this means, but it all sounds exciting. Meanwhile, Bitcoin’s price shot up by 3% today and is close to breaking $11,000 per coin again.