The crypto market is experiencing a surge in speculative trading activity, with traders leveraging high-risk instruments tied to MicroStrategy (MSTR) as Bitcoin pushes toward $100,000. Adding to this excitement is the popularity of the Defiance Daily Target 2X Long MSTR ETF (MSTX), which seeks to deliver twice the daily performance of MicroStrategy’s stock.
On Tuesday, MSTX climbed 20%, reaching a brief high above $180, while MSTR itself gained 10%, closing at $473. The bullish trend was accompanied by a spike in options trading on MSTX, with investors favoring deep out-of-the-money (OTM) call options at a $230 strike price. These options, spread across multiple expirations including June 2025, reflect traders’ eagerness to amplify returns. Deep OTM calls provide cheaper entry points with higher potential payoffs, though they carry increased risk.
The frenzy extends to MSTR’s broader options market, where call premiums hit record highs relative to protective puts. Similar bullish activity is evident in options tied to BlackRock’s Bitcoin ETF, as well as on CME and Deribit, showcasing an intense risk-on sentiment across the market.
This speculative behavior coincides with Bitcoin’s climb to unprecedented levels, driven by expectations of pro-crypto policies under President-elect Donald Trump and Federal Reserve rate cuts. On Thursday, Bitcoin surpassed $97,000, gaining 38% in November.
MicroStrategy, the largest publicly listed Bitcoin holder with 331,200 BTC valued at $3.04 billion, remains a focal point. On Wednesday, it was the most traded U.S. stock, even outpacing Nvidia, a company with a market cap nearly three times its size. This highlights the growing appeal of Bitcoin-related assets in a rapidly evolving market.
