🧑‍🏫Examples Of Narrative Trading

Narrative Trading can be based on a host of different elements such as specific news & price movements.

Simple Narrative Trades

The most popular narrative trade is ‘The Flippening’ where people believe the price of Ethereum will outperform Bitcoin. The resulting trade in this instance would be long Ethereum and short Bitcoin (ETH/BTC) .

You may even find that there is a lot of hype or talk around one token in particular for a variety of fundamental and technical reasons for e.g. Solana being pitched to outpace Ethereum. In this instance the trade you would make is to be Long Solana whilst Shorting Ethereum (SOL/ETH). The idea when pair trading narratives is that you make more from your 'winning' leg than you do on the 'losing' leg, resulting in a Net Positive PnL, all with much less than being outright long or short the market.

Recent Narratives

The Bitcoin ETF

Long $BTC / Short $ETH

Memecoin ‘Mania’

Long $PEPE / Short $ETH

EIP-4844 Standard

Long $OP / Short $ETC

Bitcoin L2s:

Long $STX / Short $ADA

AI:

Long $NEAR / Short $BTC