While Bitcoin (BTC) is reaching new all-time highs, the share price of Strategy (STR), which has invested heavily in the cryptocurrency, has failed to catch up.
Strategy Stocks Fall Become Tempting to Bet on: 10x Research Draws Attention to Disagreement with Bitcoin
A new report by 10x Research has revealed that this price divergence presents an opportunity for investors in bearish strategies.
In a note to investors on Friday, 10x Research Founder Markus Thielen recommended an options strategy called a “bear put spread” for STR shares traded on the Nasdaq.
The strategy involves buying a $370 put option with a maturity of June 27 and selling a $300 put option with the same maturity. This strategy provides maximum profit if the STR price falls to $300 or below.
STR stock fell 7% to $369 last Friday. Thielen’s proposed strategy cost $13.89. This means that the investor’s maximum loss is limited. The strategy can be used both for profit and to protect against Bitcoin investments.
Strategy has the largest Bitcoin portfolio among public companies, holding 576,230 BTC through borrowed purchases since August 2020. But while the BTC price has surpassed $110,000 in recent weeks, STR shares have stagnated at $440, well below their November 2021 peak of $543.
The divergence suggests that while Bitcoin continues to gain momentum, interest from traditional finance (TradFi) investors is waning, Thielen said. “This transaction captures the growing mismatch between Bitcoin’s strength and Strategy’s weak momentum,” he said.
Recalling that a similar price divergence occurred in November 2021, Thielen pointed out that BTC peaked at that time. However, he also emphasized that past data does not guarantee future performance.
“Bitcoin may be breaking records, but Strategy is lagging behind, and that difference is significant,” Thielen said, adding that bearish options trading can be useful not only for profit purposes but also for risk management against Bitcoin.
*This is not investment advice.
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