MicroStrategy’s Stock Stumbles Despite Bitcoin’s Rally—Here’s Why Traders Are Flocking to Short Plays

While Bitcoin charges ahead in its bull run, MSTR—the corporate crypto proxy—is lagging behind. Analysts at 10X Research spot an opportunity: bearish bets on the strategy look tempting as the divergence widens.

Short sellers smell blood in the water—after all, what’s more Wall Street than betting against a company for being too optimistic about its own trades?

Note that a similar divergence between MSTR and bitcoin marked BTC’s November 2021 top.

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.

That said, its 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.

"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.

"Buying a Strategy put spread can be profitable, but it is also an effective hedge against a long Bitcoin position," Thielen added.