A crumbling stock market could create profitable opportunities for Bitcoin traders

U.S. tech giants are expected to report second-quarter results throughout October, laying out a scenario that could eventually benefit Bitcoin.

Some of the world's biggest companies are expected to release Q2 earnings in October, including electric carmaker Tesla on October 18, tech giants Meta and Microsoft on October 24, Apple and Amazon on October 26, and Google October 30. Currently, the possibility of an even more severe global economic slowdown is in the cards and lackluster earnings could further add to the uncertainty.

Given the unprecedented nature of the US Federal Reserve tightening and growing macroeconomic uncertainties, investors are concerned that corporate profitability may begin to deteriorate. Additionally, persistent inflation continues to force businesses to cut back on hiring and adopt cost-cutting measures.

The strengthening of the dollar is particularly penalizing for companies listed in the United States, because their products become more expensive in other countries and the fall in income from abroad has a negative impact on results. Google, for example, is expected to grow revenue by less than 10%, compared to 40% growth in 2021.

The companies that make up the S&P 500 are worth a total of $32.9 trillion and crypto investors expect some of those bets to go into Bitcoin (BTC) if earnings season fails maintain modest growth - signaling that the stock market should continue to underperform.

On the one hand, traders are facing pressure from Bitcoin's correlation to stocks, but on the other hand, BTC's scarcity could shine through as inflation issues arise. This perhaps creates a huge opportunity for those betting on rising BTC prices, but extreme caution would also be required for these opening positions.

Risk-averse traders could use futures to take advantage of their long positions, but they also risk being liquidated if a sudden negative price movement occurs ahead of the corporate earnings schedule. Therefore, professional traders are more likely to opt for options trading strategies such as the "long butterfly".

By trading multiple call (call) options for the same expiration date, traders can realize gains three times the potential loss. This options strategy allows a trader to take advantage of rising...