As Bitcoin continues to break records and solidify its dominance in the crypto market, not all related assets are keeping pace. One publicly listed company known for holding a massive amount of Bitcoin is seeing its share price stall—even fall—despite BTC soaring past $110,000. This growing divergence is raising red flags among investors and market analysts alike.
A new analysis from a top market research firm has put forth a bearish options strategy on this stock, suggesting that the gap between the company’s share performance and Bitcoin’s price may be more than just a temporary disconnect.
Bitcoin Soars, But Related Equity Lags
Bitcoin recently crossed the $110K mark for the first time ever, achieving yet another all-time high in 2025. Yet, the stock of one of the largest institutional Bitcoin holders has failed to keep up. Despite being seen by many investors as a proxy for Bitcoin exposure, the company's stock price has dropped 7% in a single trading day to around $369—far below its lifetime peak of $543.
This underperformance is especially concerning given that the company currently holds over half a million BTC, more than any other publicly traded entity. One would expect the stock to surge in tandem with Bitcoin’s rally. However, the opposite appears to be happening.
Bearish Options Strategy Recommended
To capitalize on this divergence, analysts have recommended a bearish options strategy known as a "bear put spread." This trade involves purchasing a put option at a higher strike price (e.g., $370) and simultaneously selling another put option at a lower strike price (e.g., $300), both with the same expiration date.
This strategy limits both the potential loss and gain. Maximum profit is achieved if the stock price falls to $300 or below by expiration. The maximum loss is limited to the initial premium paid for the spread, which stood at $13.89 per contract as of the most recent trading session.
This approach is particularly appealing in a market where the equity is lagging behind its underlying asset, as it allows investors to profit from potential downside while managing risk.
Signs of Weakness Behind the Scenes
Several factors may explain why this crypto-aligned stock is underperforming despite Bitcoin's strength:
Dilution of Shares: Since 2020, the company’s total number of outstanding shares has more than tripled due to aggressive fundraising and convertible note issuance. This dilution has significantly impacted per-share value and investor sentiment.
Legal and Regulatory Headwinds: Ongoing legal challenges and increasing regulatory scrutiny related to how the company manages its Bitcoin holdings have created uncertainty among institutional investors.
Volatile Earnings: Previous Bitcoin downturns have wreaked havoc on the firm’s balance sheet, resulting in multi-billion dollar unrealized losses. The potential for such volatility continues to weigh heavily on investor confidence.
Investor Fatigue: There’s a growing perception that the easy gains have already been made. While retail traders may still be bullish, institutional players appear to be scaling back their enthusiasm.
Historical Parallels and Market Sentiment
Analysts point out that a similar disconnect between Bitcoin and this equity occurred during the market peak in late 2021, which preceded a significant downturn in both the crypto market and broader tech sector. Although history doesn’t guarantee future outcomes, the recurrence of such divergences often signals a shift in momentum.
Interestingly, this divergence also reflects shifting sentiment within traditional finance. While Bitcoin continues to attract attention and capital, many investors are reconsidering the role of crypto-heavy stocks in their portfolios, particularly when they carry additional operational, legal, and macroeconomic risks.
A Tactical Hedge for Bitcoin Bulls
The recommended bear put spread isn’t just a standalone trade—it also serves as a hedge for those holding long Bitcoin positions. If Bitcoin continues to rise, the losses from this bearish equity play are limited. But if Bitcoin falters or the company’s stock experiences a sharper-than-expected correction, the trade becomes profitable.
This kind of tactical hedging is becoming increasingly common in crypto-linked equity trading, where price action can diverge due to company-specific risks or broader financial market trends.
What This Means for Crypto Investors
For traders and long-term investors alike, this situation provides valuable insights:
1. Exposure Isn’t Everything: Just because a company holds a large amount of crypto doesn’t mean its stock will always track crypto prices.
2. Beware of Overleveraged Plays: Companies that use debt financing to accumulate digital assets may face amplified risks during market volatility.
3. Options Can Offer Balanced Risk: In times of uncertainty, strategies like put spreads can offer a safer way to play both sides of the market.
4. Watch for Macro Signals: Divergences between correlated assets often precede broader shifts in investor behavior.
Final Thoughts
As Bitcoin charts new highs, it’s essential for investors to look beyond headlines and focus on deeper market dynamics. Not all crypto-related stocks are created equal—and as this case shows, being heavily tied to Bitcoin does not guarantee parallel performance.
Smart investors will continue to monitor such divergences and use strategic tools like options to navigate the increasingly complex relationship between crypto assets and traditional equities.
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