Why Did the Share Prices of Strategy Not Increase While Bitcoin (BTC) Reached All-Time High Levels? Here Are the Details.

Bitcoin (BTC) reached all-time highs, while the share price of Strategy’s (STR), which made a large investment in the crypto coin, could not catch the rise.

The Bet on Decline in Strategy Shares Has Become Attractive: 10x Research Draws Attention to the Discrepancy with Bitcoin

A new report published by 10x Research revealed that this price discrepancy presents opportunities for investors in bearish strategies.

Markus Thielen, founder of 10x Research, suggested an option strategy called "bear put spread" for STR stocks traded on Nasdaq in a note sent to investors on Friday.

The strategy involves buying a put option with a strike price of 370 dollars expiring on June 27 and selling a put option with a strike price of 300 dollars expiring on the same date. This strategy maximizes profit if the STR price falls to 300 dollars or below.

The STR share fell by 7% to $369 last Friday. The cost of the strategy proposed by Thielen was $13.89. This means that the investor's maximum loss is limited. The strategy can be used for both profit purposes and as protection against Bitcoin investments.

Strategy has the largest Bitcoin portfolio among publicly traded companies, holding 576,230 BTC through borrowings since August 2020. However, in recent weeks, while the BTC price has surpassed $110,000, STR shares have stalled at around $440, significantly below their peak of $543 in November 2021.

Thielen noted that this divergence indicates a decrease in interest from traditional finance (TradFi) investors, despite Bitcoin maintaining its momentum. "This transaction captures the growing discord between Bitcoin's strength and Strategy's weak momentum," he said.

Thielen, reminding that a similar price divergence was experienced in November 2021, pointed out that BTC reached its peak at that time. However, he also emphasized that past data does not guarantee future performance.

"Bitcoin may be breaking records, but Strategy is falling behind and this gap is significant," Thielen stated, expressing that downward option trades could be beneficial not only for profit but also for risk management against Bitcoin.