10x Research, led by Markus Thielen, has recently taken a cautious stance on MicroStrategy (MSTR) by favoring bearish options strategies as the share price of this Nasdaq-listed Bitcoin holder diverges from the upward momentum of Bitcoin (BTC).
In a detailed report circulated to clients on Friday, Thielen recommended implementing a bear put spread on MSTR, which includes a long position in the $370 put option alongside a short position in the $300 put, both set to expire on June 27.
This strategic move will yield maximum profit if MSTR falls to $300 or lower by the expiration date, thereby underscoring a bearish outlook on the stock. A put option effectively provides insurance against potential price declines in exchange for a modest upfront premium payment.
For those entering this put spread, the maximum loss is confined to the initial cost of the strategy, which was $13.89 as of Friday. Notably, MSTR’s share price experienced a 7% decline, settling at $369 as per TradingView data. MicroStrategy currently holds a staggering 576,230 BTC, making it the largest Bitcoin holder among publicly traded companies, a position it has reached through a consistent accumulation strategy financed by debt since August 2020.
Over the past few years, MicroStrategy has become a favored vehicle for institutions seeking exposure to Bitcoin without the need for direct cryptocurrency ownership. However, recent trends indicate that the stock price has begun to diverge from Bitcoin’s upward trajectory, raising concerns within the cryptocurrency community.
While Bitcoin soared to a record high of over $110,000 last week, MSTR’s growth has stalled around $440, falling significantly short of its lifetime peak of $543 achieved in November.
“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 stated, elucidating the rationale behind the bear put spread.
Thielen has a notable track record, having correctly predicted Bitcoin’s recent ascendancy into six figures. It is essential to observe that the historical divergence between MSTR and Bitcoin coincided with BTC’s peak in November 2021.
While past performance does not guarantee future results, the current divergence presents indicators of diminishing enthusiasm for Bitcoin among traditional finance (tradfi) investors. Additionally, this MSTR bear put spread may serve as a hedge against potential weaknesses in Bitcoin’s performance.
“Bitcoin is breaking records, but Strategy is stalling—and that divergence matters. Retail investors may still be chasing the dream, unaware that the right-tail upside might be limited. This pivot marks a crucial change, particularly when market dynamics lead to reduced premium availability and overall stagnation,” Thielen remarked.
“Engaging in a Strategy put spread can not only be profitable but also provide an effective hedge against long Bitcoin positions,” he added.
