As Bitcoin continues to weaken, market sentiment toward Strategy has turned noticeably bearish. Traders this week have focused their bets on this most aggressively Bitcoin-positioned publicly traded company, with capital flows in related options and preferred shares shifting toward short positions.
Options trading is clearly bearish.
On Friday, the put option volume for the stock exceeded call option volume by more than double, and the number of puts bought surpassed calls by more than threefold. According to data cited by CNBC, the total options trading volume reached approximately $335 million, with about $250 million related to put options.
Some large trades in the YieldMax Short MSTR Option Strategy ETF (WNTR) are also related to spread strategies associated with the short Strategy. The fund has risen approximately 30% since May 11, reflecting growing market bets on downward pressure on Strategy's stock price.
STRC has dropped to its lowest level in nearly a year.
Strategy's variable-rate preferred stock, STRC, fell 3.6% on Thursday to $92, hitting its lowest level since November last year. The product has been described by Michael Saylor as "digital credit" and compared by him to money market funds.
David Dziekanski, CEO of Quantify Funds, said the market is reassessing the risks associated with Saylor. He noted that STRC’s price may require higher yields to return to $100.
The interest rate environment is increasing pressure.
Selling of U.S. Treasuries and rising yields have also put pressure on these assets. The CME FedWatch tool shows that, following strong employment data, market expectations for another rate hike this year have risen above 40%.
CNBC also noted that Bitcoin fell below $60,000 on Friday, marking its first drop below that level since the end of 2024.