Beware the Bitcoin Bubble 🚨

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The Plot Thickens… 🤔

  • 10x Research, those clever folks, are recommending a bear put spread on MicroStrategy (MSTR). Why, you ask? Well, it seems MSTR’s price is diverging from bitcoin‘s upward trend, like a ship sailing away from the motherland 🚣‍♀️.
  • This strategy is like a game of chicken, where you profit if MSTR falls to $300 or lower by June 27. But don’t worry, the maximum loss is limited, so you won’t lose your shirt 👕.
  • Despite bitcoin reaching record highs, MSTR’s stock price has stalled, like a car running out of gas ⛽️. This suggests that investor enthusiasm is waning, like a once-hot romance gone cold ❄️.

Markus Thielen, the mastermind behind 10x Research, is betting on a bearish outcome for MSTR. He’s recommended a bear put spread, which involves a long position in the $370 put option and a short position in the $300 put, both expiring on June 27. It’s like a game of financial Jenga, where you need to balance the blocks just right 🎲.

This strategy will yield maximum profit if MSTR drops to $300 or lower by June 27. But don’t get too excited, the maximum loss is limited to the initial cost of the strategy, which was $13.89 on Friday. It’s like a safety net, but not too comfy 😴.

MSTR, however, fell 7% to $369 on Friday, according to data source TradingView. MicroStrategy holds 576,230 BTC, the largest for any publicly-listed company, having steadily accumulated coins since August 2020 through debt financing. It’s like a big ol’ bitcoin hoard, but not too shiny 💎.

Over the years, MSTR has emerged as a preferred instrument for institutions looking to take exposure to BTC without having to actually own the cryptocurrency. It’s like a bitcoin proxy, but not too convincing 🤥.

The stock price has recently diverged from the upward-trending BTC price, raising alarm bells on crypto social media. It’s like a canary in the coal mine, but not too loud 🐦.

While BTC hit a record high of over $110K last week, MSTR’s rise stalled at around $440, falling well short of its lifetime peak of $543 reached in November. It’s like a missed opportunity, but not too surprising 🤷‍♂️.

“This trade captures the growing disconnect between Bitcoin’s strength and MicroStrategy’s fading momentum and volatility. Despite Bitcoin reaching all-time highs, MSTR remains significantly below its peak, suggesting investor enthusiasm is waning,” Thielen said, explaining the bear put spread. It’s like a warning sign, but not too clear 🚨.

Thielen correctly predicted BTC’s recent rise into six figures. He’s like a bitcoin prophet, but not too reliable 🔮.

Note that a similar divergence between MSTR and bitcoin marked BTC’s November 2021 top. It’s like a déjà vu, but not too comforting 😬.

Past data does not guarantee future results, and the latest divergence between MSTR and BTC does not necessarily mean that bitcoin’s bull run is over. It’s like a warning, but not too clear ⚠️.

That said, it does suggest waning enthusiasm about BTC among tradfi investors. In addition, the MSTR bear put spread could offer a hedge against a potential weakness in BTC. It’s like a safety net, but not too comfy 😴.

“Bitcoin is breaking records, but Strategy is stalling—and that divergence matters. Retail is still chasing the dream, unaware that the right-tail upside may be gone. This is where the game changes: when the middleman runs out of premium and the engine stalls,” Thielen said. It’s like a wake-up call, but not too loud ⏰.

“Buying a Strategy put spread can be profitable, but it is also an effective hedge against a long Bitcoin position,” Thielen added. It’s like a clever trick, but not too convincing 🤔.

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2025-05-26 11:43