If you have 43.636 times number of DRK vs Bitcoin and the price of BTC is more than 43.636 times the current price of DRK, well then (do you already see where I am going with this?) if BTC goes back to 1-2$, you need DRK to increase more than 43.636 times before you only break even on your risky investment in the sector.
Yes - I see what your saying with those numbers. However you're looking at it from a $dollar perspective - i.e. when you say "break even" I take it you mean break even in dollar terms.
When investing, you have to take a decision about what it is you're maximising. I decided on Bitcoin. Not dollars, not DRK but BTC. The only reason I'm invested in DRK is in the hope that it will increase my BTC holdings as is everyone else since Bitcoin is currently the reserve currency in which all alts are priced.
The hedging of one crypto with another does make sense if you're valuing everything in Bitcoin and not fiat therefore.
I guess that is one perspective, however lets remember that bitcoin is currently valued $ 4,166,814,315. This is the valuation of a relatively small company. Very far from the value a major currency if you will. Lets say Bitcoin is a tape player company, this is like saying you also invest in a CD company so that when it will go up you can sell it to buy more of the tape player company… If you don't think that CD's will replace tape players thats fine, however if you think DRK will go up faster than BTC so you can buy more BTC in relation to this short term, well then why would you not invest more in DRK at least short term according to your belief. What you are basically doing is partly and inefficiently hedging, which is actually increasing your exposure to loss in the short term, at least until you close your position. Just throwing that out there buddy, good luck !
