Key Points
- Bitcoin is nearing the significant $100,000 mark, sparking interest among traders.
- Traders are turning to the Defiance Daily 2X Long MSTR ETF to boost profits as Bitcoin rises.
Bitcoin is on the verge of reaching the highly anticipated $100,000 milestone. This landmark event has piqued the interest of traders seeking to expand their wealth.
To reach this goal, traders are resorting to the Defiance Daily 2X Long MSTR ETF, a leveraged fund connected to MicroStrategy’s stock. As Bitcoin’s value rises, traders are turning to this ETF and its options to amplify their profits, embracing the market’s high-risk, high-reward trend.
Increased Bitcoin Value Encourages Riskier Bets
Bitcoin’s rapid climb towards $100,000 has resulted in a surge in trading activity. Many are seeking higher returns through riskier, leveraged products.
One such product, the Defiance Daily Target 2X Long MSTR ETF, trading as MSTX on the Nasdaq, has gained significant traction. It’s designed to deliver 200% of MicroStrategy’s daily stock performance, making it a popular choice for traders betting on Bitcoin’s rise.
MicroStrategy’s stock, closely linked to Bitcoin due to its substantial holdings, has attracted heavy attention, propelling MSTX into the limelight. Recently, as MicroStrategy shares soared 10% to $473, the ETF surged 20%, briefly exceeding $180. This massive growth sparked a frenzy in the options market, with traders scrambling to maximize their gains.
As the MSTX ETF continues its climb, traders have been flocking to deep out-of-the-money (OTM) call options. These options are priced lower than those closer to the market rate but offer huge upside potential when ETF grows. One of the most popular contracts hinges on the $230 strike price, with significant demand across multiple expiry dates. This also includes a long-term contract set to settle in June 2025.
Deep OTM calls allow traders to control a large portion of the underlying asset with only a small upfront premium. If the ETF continues to rise, these options can offer massive returns, making them an appealing bet for those looking to capitalize on Bitcoin’s growth.
Bullish Sentiment at Record Highs
The demand for these options has pushed call premiums to record highs, far outpacing put options typically used for downside protection.
This extreme bullish sentiment mirrors similar behavior seen in other crypto products, including the CME and Deribit options tied to Bitcoin ETFs from BlackRock Inc (NYSE: BLK). This growing speculative fervor signals retail investors are betting big, often preceding market corrections when the speculative bubble bursts.
The market excitement goes beyond Bitcoin’s price. It is also driven by hopes for favorable policies under President-elect Donald Trump and expected Fed rate cuts. These factors have bolstered the belief that Bitcoin will continue its upward trajectory. With Bitcoin hitting new highs above $97,000 this week, many believe the rally has more room to grow.
At the heart of this explosive market activity is MicroStrategy Inc (NASDAQ: MSTR), the world’s largest publicly traded holder of Bitcoin. The company owns 331,200 BTC, valued at about $3.04 billion it steadily accumulated since 2020. Its stock, deeply tied to Bitcoin’s price, has become a favorite for leveraged bets on the cryptocurrency’s future.
