Should I adjust position size before Bitcoin used to hate inflation. Now it might be the opposite?

Bitcoin's relationship with inflation has flipped from a hedge narrative to a risk asset. In high inflation environments with rising rates, BTC often sells off with equities as liquidity tightens. When inflation cools and the Fed signals rate cuts, Bitcoin rallies hard on liquidity expectations. This is why BTC now behaves more like a growth stock or tech proxy than digital gold.

Position sizing should reflect current macro regime, not outdated stories. Track CPI prints, Fed dot plot, and real yields. In a disinflationary rate-cut cycle, you can run normal or slightly larger size if your edge is strong. During reflation or stagflation scares, cut size 30-50% because correlation to SPX spikes and volatility expands.

For your SPX iron condors, watch VIX levels closely. When Bitcoin is driving risk sentiment, a VIX above 18 usually means wider wings or smaller notional. Use the ALVH methodology to define your adjustment triggers: if VIX rises 3 points intraday or your delta exposure exceeds 40% of wing width, reduce size immediately rather than legging into adjustments. Keep position size tied to account volatility, not narrative. Always size so a 2-3% SPX gap leaves you under 1% portfolio risk.