In March 2023, **MicroStrategy (MSTR)**, known for its massive Bitcoin holdings, saw its stock price surge **165%** while Bitcoin itself only rose **65%**. This seemed unsustainable, and the article details how the author profited by **selling options** on MicroStrategy stock.  They recognized that MicroStrategy's stock price was **overvalued**, and used a **credit call spread** strategy to capitalize on this. This strategy involved selling a call option on MicroStrategy with a lower strike price and buying a call option with a higher strike price. This generated a net credit, allowing the author to profit if the stock price stayed below the lower strike price.  The author's trade was successful, as MicroStrategy's stock price fell within a few months, allowing them to **earn a 100% profit**. The article emphasizes the importance of understanding **volatility** and choosing the right strategies for different situations. It also highlights the potential for profits when identifying overvalued stocks and using options trading techniques.

<h3>The Last Time MicroStrategy Went Parabolic&nbsp;</h3>
<p>Remember back in mid-March, when Bitcoin was up about 65% year-to-date but&nbsp;<strong>MicroStrategy, Inc.</strong>&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/mstr#NASDAQ">MSTR</a>), the firm best known for hoarding Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) on its balance sheet, was up&nbsp;<strong>165%</strong>&nbsp;YTD?&nbsp;</p>
<p><img alt="" src="https://cdn.benzinga.com/files/u69610/mstr_versus_bitcoin.jpg" style="height:330px; width:750px" /></p>
<p>If you do remember that, you probably thought that was crazy. We did too.&nbsp;</p>
<p>You probably also thought about betting against it. You probably didn&#39;t though, right? You didn&#39;t want to short shares of MSTR, for good reason: what if the stock kept going up? Your potential losses would have been unlimited, and you could have started getting margin calls from your broker.&nbsp;</p>
<p>Maybe you thought about buying puts on MicroStrategy instead, but balked at the ridiculous prices for them. We certainly did. Instead, we used another approach: taking advantage of ridiculous options prices on MicroStrategy at the time to profit from selling options. Here&#39;s how we did it.&nbsp;</p>
<h3><strong>Our Trade Thesis&nbsp;</strong></h3>
<p>Our thesis was pretty simple: Bitcoin prices had probably gotten ahead of themselves, but even if they hadn&#39;t MicroStrategy&#39;s share price certainly had.&nbsp;</p>
<h3><strong>Structuring The Trade&nbsp;</strong></h3>
<p>When option prices are high, we look for ways to sell them. Just as buying a put option on a stock is a way to bet against stock, so too is selling a call option on it. The problem with selling a naked call (i.e., when you don&#39;t own the underlying stock) is that your risk is ...</p><p><a href=https://www.benzinga.com/24/06/39506193/betting-against-a-bitcoin-hoarder-how-we-profited-from-microstrategys-overvaluation alt=Betting Against A Bitcoin Hoarder: How We Profited From MicroStrategy&#039;s Overvaluation>Full story available on Benzinga.com</a></p>

Loading...Loading...The Last Time MicroStrategy Went Parabolic Remember back in mid-March, when Bitcoin was up about 65% year-to-date but MicroStrategy, Inc. MSTR, the firm best known for hoarding Bitcoin BTC/USD on its balance sheet, was up 165% YTD? If you do remember that, you probably thought that was crazy. We did too. You probably also thought about betting against it. You probably didn't though, right? You didn't want to short shares of MSTR, for good reason: what if the stock kept going up? Your potential losses would have been unlimited, and you could have started getting margin calls from your broker. Maybe you thought about buying puts on MicroStrategy instead, but balked at the ridiculous prices for them. We certainly did. Instead, we used another approach: taking advantage of ridiculous options prices on MicroStrategy at the time to profit from selling options. Here's how we did it. Our Trade Thesis Our thesis was pretty simple: Bitcoin prices had probably gotten ahead of themselves, but even if they hadn't MicroStrategy's share price certainly had. Structuring The Trade When option prices are high, we look for ways to sell them. Just as buying a put option on a stock is a way to bet against stock, so too is selling a call option on it. The problem with selling a naked call (i.e., when you don't own the underlying stock) is that your risk is unlimited. However high that stock price goes, you will be obligated by the call option contract you sell to deliver it to the party that bought the contract from you. That means, you'll have to buy the stock at the current market price, whatever that is. Instead, we opened a credit call spread on MicroStrategy. A credit call spread is when you sell call option on a security, but buy the next higher strike call option. We decided to use in-the-money calls to generate a higher credit. We wanted a net credit high enough so that our max gain was equal to our max loss, so we put in a limit order for a net credit of $5: Components of the Credit Call Spread: Sell $1,490 Call: Expiring 6/21/2024 Buy $1,500 Call: Expiring 6/21/2024 Net Credit Received: $5 Key Points: Max Gain: The maximum gain occurs if MSTR is at or below $1,490 at expiration. Max Loss: The maximum loss occurs if MSTR is at or above $1,500 at expiration. Break-Even Point: The break-even point is the strike price of the short call plus the net credit received. Calculations: Max Gain: The net credit received, which is $5. Max Loss: The difference between the strike prices ($1,500 - $1,490 = $10) minus the net credit received ($10 - $5 = $5). Break-Even Point: $1,490 (strike price of the short call) + $5 (net credit received) = $1,495. Basically, if MicroStrategy closed above $1,500 per share on Friday, we would have lost $500 per contract; if it closed below $1,490, we would have kept $500 per contract; and if closed at some price between $1,490 and $1,500, we would have lost less than $500 if it closed below $1,495 and we would have made less than $500 if it closed above $1,495. As it happened, MicroStrategy closed at $1,483.76 on Friday, so we made a 100% profit on our trade. Why The June Expiration? We looked the last time, MicroStrategy had gone parabolic, back in 2021, and saw that it gave back most of its gains within three months. Its drop this year has been much more modest, but it did fall enough within a few months for our trade to cash. This Approach Works Best For Volatile NamesDifferent situations call for different approaches. In our most recent bearish trade, a bet against a regional bank, we wouldn't have gotten attractive prices for a credit call spread on it. In that case, we simply bought puts on it. Click on the old time bank image above to go to that post. If you'd like a heads up when we place our next trade, feel free to subscribe to our trading Substack/occasional email list below. If you'd like to stay in touchYou can scan for optimal hedges for individual securities, find our current top ten names, and create hedged portfolios on our website. You can also follow Portfolio Armor on X here, or become a free subscriber to our trading Substack using the link below (we're using that for our occasional emails now).This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Betting Against A Bitcoin Hoarder: How We Profited From MicroStrategy's Overvaluation

Profiting From MicroStrategy's Bitcoin Obsession

The **U.S. exchange-traded fund (ETF) market** has reached a monumental milestone, surpassing **$10 trillion in assets**. This surge was fueled by a remarkable **$691 billion** in inflows this year alone, as reported by **Bloomberg**. This impressive surge has set the stage for a record-breaking year, with ETF flows on track to shatter the previous record of **$900 billion in inflows**.

## **VOO, VGT Outshine SPY In Fund Flows**
According to **ETF.com data**, as of the end of August 2024, the market saw a robust performance, with **$71 billion** pouring into ETFs during the month. Leading the charge were heavyweights such as the **Vanguard S&P 500 ETF (VOO)** and the **Vanguard Information Tech ETF (VGT)**, while the **SPDR S&P 500 (SPY)** experienced notable outflows. As investors diversify their portfolios, it's clear that ETFs are becoming the go-to investment vehicle.

## **VOO, IVV, VTI Lead YTD Gains**
Among the top gainers for the year were the **S&P 500 index-tracking Vanguard S&P 500 ETF** and **iShares Core S&P 500 ETF (IVV)**. The Vanguard S&P 500 ETF has attracted over **$60.5 billion** in net flows and boasts an impressive **$503 billion in assets under management (AUM)**. Following closely is the iShares Core S&P 500 ETF, raking in about **$43.4 billion** in net flows, while the **Vanguard Total Stock Market Index Fund ETF (VTI)** pulled in a respectable **$21 billion**.

## **Tech-Focused QQQ, Bitcoin ETF Not Far Behind**
The tech sector hasn't been left behind either, with **Invesco QQQ Trust (QQQ)** gathering nearly **$20.9 billion** this year, showcasing a vibrant interest in technology stocks. The cryptocurrency space is also making waves, as seen in the remarkable inflows into **iShares Bitcoin Trust (IBIT)**, which attracted around **$20.9 billion**, capturing an astonishing **98.63% of its AUM**. With these trends, it’s clear that ETFs continue to be a major player in the investment landscape, providing investors with diverse options and strategic exposure to various sectors. 

![Market News](https://www.shutterstock.com/image-photo)


U.S. ETF market surpasses $10 trillion in assets with record-breaking inflows. Top gainers include Vanguard's VOO and iShares Bitcoin Trust.

Record $691 Billion Inflows: How Bitcoin ETFs and S&P 500 ETFs Are Shaping the Future of Investments

### Ohio's Bold Move Towards Cryptocurrency

Ohio State Senator **Niraj Antani** has introduced **legislation** on **September 30, 2024**, aimed at legalizing **Bitcoin** (BTC) and other **crypto payments** for taxes and fees at the state and local levels. This initiative is a significant step towards integrating digital assets into government transactions.

![Ohio senator introduces bill to legalize Bitcoin, crypto payments for state taxes, fees](https://cryptoslate.com/wp-content/uploads/2024/09/state-tax-crypto--768x403.jpg)

The proposed bill allows Ohioans to utilize **digital assets** to meet their tax obligations, signaling a push for **wider adoption of cryptocurrency** within state governance. According to Antani, "**Cryptocurrency is not just the future, but it’s the present of our 21st-century economy. We must encourage innovation and free enterprise in Ohio.**"

### Reviving Crypto Payment Options

In **2018**, Ohio became the first state to accept crypto for tax payments, but the program was halted in **2019** due to regulatory challenges. Antani's new legislation aims to rectify this by empowering Ohio to lead in **technological advancement** and **economic development**. He stated, "**The State Board of Deposits should have acted, and since they haven’t, we will.**"

Additionally, the bill permits **state universities** and **public pension funds** to invest in cryptocurrencies, enhancing their financial strategies.

### A Growing Trend Among States

Despite federal hesitance under the Biden administration, several states have been exploring or enacting legislation for crypto payments. Recently, **Congressman Matt Gaetz** introduced a bill to allow crypto payments for federal taxes, highlighting a broader trend of increasing interest in the use of cryptocurrency for government payments.

While states like **Colorado** and **Wyoming** are leading the charge, Ohio's renewed push under Antani could position it as the second state to successfully implement such a program, following Colorado's example in **2022**.

Other states like **Arizona** and **Louisiana** are also making strides towards accepting cryptocurrencies for tax payments and state services, reflecting a significant shift in how states view digital currencies.

### Conclusion

The introduction of this bill by Senator Antani marks a pivotal moment for Ohio and could set a precedent for other states looking to embrace the **cryptocurrency revolution** in public finance.

Ohio State Senator Niraj Antani introduced legislation aiming to legalize crypto payments for taxes and fees on Sept. 30.

Ohio Senator Pushes for Bitcoin and Crypto Payments for State Taxes: A Game Changer for Digital Currency Adoption

### Chinese Stock Market Hits Record Highs

The **Chinese stock market** has just experienced its best single day in over a decade, igniting interest across various sectors. Investors are eager to understand which sectors are likely to benefit the most from this upward trend.

### Sectors to Watch

With the surge in Chinese stocks, analysts are closely monitoring sectors such as **technology**, **consumer goods**, and **financial services**. These areas are expected to see significant growth as investor confidence grows.

### The Role of Government Policies

Government policies are playing a crucial role in this surge. Recent **stimulus measures** and **economic reforms** are designed to bolster market confidence, making it a pivotal time for investors to engage with the Chinese market.

![Chinese Stock Market](https://image.cnbcfm.com/api/v1/image/107148248-1667938600296-fred_IMG_3044.jpg?v=1667938658&width=600&height=300)

### Market Sentiment

Overall, the market sentiment is **bullish**, with many investors optimistic about the potential for continued growth in the coming months. This optimism is fueled by both domestic and international factors that are aligning favorably for Chinese equities.

Stay tuned as we continue to track the developments in this dynamic market environment.

The Chinese stock market just had its best single day in more than a decade. 

Chinese Stocks Surge: Which Sector Will Reap the Benefits?

Bitcoin and **crypto stocks** saw a **pullback** on the final trading day of September, despite a recent **rally**. The flagship cryptocurrency dipped **3.5%** to **$63,612.63**, following a brief return to the **$65,000** mark last week. Meanwhile, notable crypto stocks like **Coinbase** and **MicroStrategy** also faced declines of **3%** and **5%** respectively in premarket trading.  

![Bitcoin](https://image.cnbcfm.com/api/v1/image/107078012-1655709503739-gettyimages-1234311678-sindeyev-notitle210729_npFPY.jpeg?v=1727700300&w=1858&h=1045&vtcrop=y)  
*Bitcoin is facing a number of headwinds including low liquidity which is contributing to volatility. U.S. regulators are also heavily scrutinizing the crypto industry.*  

As the market approaches the holiday season, investors are bracing for possible **strikes at ports** along the East Coast and Gulf Coast.  

Despite the recent downturn, Bitcoin is on track for its **strongest September ever** with an **8% gain**, marking its second consecutive positive September—historically a weak month for the cryptocurrency. In the past week, Bitcoin ETF inflows reached their highest levels since mid-July, driven by a **policy reversal** from the People’s Bank of China.  

Analysts have noted that Bitcoin's recent climb of nearly **5%** may indicate **overbought conditions**. Coinbase is projected to finish the month with a **4% gain**, although it has dropped nearly **14%** for the quarter. Conversely, MicroStrategy has surged **33%** this month and **28%** for the quarter.  

As the market heads into a seasonally strong quarter for crypto and risk assets, Bitcoin's correlation with the **S&P 500** suggests it may benefit from anticipated **rate cuts** and favorable market conditions following the U.S. presidential election.

Bitcoin and crypto stocks retreated on the final trading day of September following a rally last week.

Bitcoin's Rollercoaster September: Rally, Retreat, and Record Gains Ahead

### Bitcoin ETFs Attract Record Inflows

Bitcoin spot **ETFs have pulled in over $1 billion** in net inflows over the past week, marking the highest level since July. According to analysts, this trend indicates that institutional investors are becoming increasingly **receptive to digital assets**.

![Weekly ETF Flows](https://cdn.decrypt.co/wp-content/uploads/2024/09/week-over-week-etf-coinshares.png)
*Source: CoinShares*

As Bitcoin's price hovers around **$64,000**, the investment landscape is shifting. BlackRock's Ethereum ETF (ETHA) led the charge with an inflow of **$94.9 million**, closely followed by Fidelity's Ethereum ETF (FETH) with **$64.9 million**. Notably, Grayscale's ETF (ETHE) saw an outflow of **$127 million**, suggesting a redirection of capital towards newer products.

### Renewed Investor Confidence

Avinash Shekhar, Co-founder and CEO of Pi42, highlighted that the surge in net inflows reflects a **strong resurgence of investor confidence**, particularly following the recent **Federal Reserve interest rate cut**. Shekhar also noted a renewed interest in Ethereum ETFs, which had their **second-best week** since launch.

### Macro Trends Supporting Growth

The influx of capital into Bitcoin-based financial products indicates a growing confidence in the **cryptocurrency market** amid macroeconomic developments. Japan is reviewing its cryptocurrency regulations, which could lead to **reduced taxes** on digital assets and facilitate the launch of domestic funds investing in tokens.

### Market Performance

As of early Monday morning, Bitcoin (BTC) was trading at **$63,880**, down approximately **2.8%** from previous levels, while Ethereum (ETH) traded at **$2,630**, reflecting a **0.7% decrease**. Despite these fluctuations, the overall sentiment remains **bullish** as data from CoinShares indicates a third consecutive week of inflows totaling **$1.2 billion** across digital asset investment products.

### Altcoin Movements

Interestingly, while Bitcoin dominated the inflows, Ethereum also broke its **5-week negative streak** with inflows of **$87 million**. Other altcoins had mixed reactions, with Litecoin (LTC) and XRP receiving modest inflows, while Binance and Stacks (STX) faced outflows.

### Bullish Indicators

Data from CryptoQuant shows that the **Bitcoin supply in profit** has remained high, a typical indicator of a bullish market trend. Historically, Bitcoin's supply in profit stays above **80% during bull cycles**, and recent fluctuations have presented buying opportunities for investors.

*Edited by Stacy Elliott.*

“The trends we are observing indicate that the market is increasingly receptive to digital assets," an analyst told Decrypt.

Bitcoin ETFs Surge: Over $1 Billion in Inflows Amid Growing Institutional Interest

### Snutx Secures Dual Licensing for Enhanced Compliance

NEW YORK, Sept. 30, 2024 (GLOBE NEWSWIRE) -- **Snutx**, a premier cryptocurrency exchange, has achieved a significant milestone by securing the **Money Services Business (MSB)** license from the U.S. Financial Crimes Enforcement Network (**FinCEN**) and obtaining the MSB license in **Canada**. This dual licensing underscores Snutx's commitment to providing a **safer** and more **legitimate trading environment** for users worldwide.

### Commitment to User Experience

Since its inception, Snutx has focused on delivering **reliable** and **convenient cryptocurrency trading services** to a global audience. By continuously optimizing its technology and services, the platform has quickly established a strong reputation in the industry, noted for its **excellent user experience**, **robust security**, and **advanced trading algorithms**.

### Global Expansion and Compliance

The acquisition of MSB licenses in both Canada and the United States is a testament to Snutx's **globalization strategy**. These licenses require strict adherence to **anti-money laundering (AML)** and **know your customer (KYC)** regulations, enabling Snutx to operate legally in these critical markets. This accomplishment greatly enhances the platform's **credibility** and **influence** in the global market.

### Diverse Investment Options

Snutx offers a variety of **cryptocurrency trading** options and **financial derivatives**, empowering users with diverse investment choices to effectively manage risk and achieve asset growth. The platform's **customer service team** is available around the clock, ensuring users receive professional support and consultation.

### Future Prospects

Looking ahead, Snutx plans to increase its **investment in technology development** and **market expansion**, aiming for a larger share of the global market. The company intends to apply for more financial licenses in various countries and explore the application of **blockchain technology** in other fields, promising users more **innovative financial products**.

### Competitive Edge

In the fiercely competitive cryptocurrency market, Snutx’s unique advantages and **spirit of continuous innovation** position it for future success. As the market matures, the platform will continue delivering high-quality services and products, empowering users to maximize their returns in cryptocurrency investments. The future of Snutx is filled with **endless possibilities**, and the industry looks forward to its exciting performance on the global stage.

![Snutx Transaction Services](https://ml.globenewswire.com/media/YjVlMDE0MzUtZjRkMy00OTU5LWJjOGItOTFiMGQ0NzE4OTEwLTUwMDEyODU2Mg==/tiny/Snutx-Transaction-Services-Ltd.png)

NEW YORK, Sept.  30, 2024  (GLOBE NEWSWIRE) -- Snutx, a premier cryptocurrency exchange, has not only secured the Money Services Business (MSB) license...

Snutx: Pioneering Compliance and Innovation in the Cryptocurrency Exchange Landscape

### Caution on Cryptocurrency Development

At the **2024 Tsinghua Wudaokou Chief Economists Forum** in Beijing, **Lou Jiwei**, the former finance minister of China, **urged caution** regarding the development of cryptocurrencies. He highlighted the **potential dangers** that digital currencies pose to **financial stability**, particularly due to their **high volatility** and association with **illegal activities**.

![China's Former Finance Minister Urges Caution on Cryptocurrency Development](https://s.yimg.com/ny/api/res/1.2/illsmBqhQQMSvn8SjvBb.A--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTU0MDtjZj13ZWJw/https://media.zenfs.com/en/coinmarketcap_783/02631ac4bb855b333c87032581ea051c)

Lou's comments came at a time when the **cryptocurrency landscape** is rapidly evolving. He referenced the **changing attitudes** in the United States towards digital assets, particularly following the **SEC's approval** of **Bitcoin** and **Ethereum** exchange-traded funds. Lou emphasized that this shift in policy demands careful attention from **Chinese policymakers**.

He was clear about the **adverse impacts** cryptocurrencies could have on global markets, asserting that the **volatility** of these assets could lead to significant **financial fragility**. Furthermore, he raised concerns about the **instrumentalization** of digital currencies for **money laundering** and **terrorism financing**, stressing the need for thorough consideration of these risks to safeguard financial systems.

Lou stated, "We should study the **international changes** and **policy adjustments** because it is a very important topic for the development of the **digital economy**." He called for a deeper understanding of the **risks** and **innovations** surrounding cryptocurrencies.

Despite China's **2021 ban** on Bitcoin mining and trading, the country remains a dominant force in the mining sector, controlling over **55%** of the Bitcoin mining network, although this dominance is slowly shifting towards the **United States**.

At the recent 2024 Tsinghua Wudaokou Chief Economists Forum in Beijing, Lou Jiwei-former finance minister of China calls for caution to be taken regarding cryptocurrency development.

Profiting From MicroStrategy's Bitcoin Obsession

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Other Latest News

Record $691 Billion Inflows: How Bitcoin ETFs and S&P 500 ETFs Are Shaping the Future of Investments

Ohio Senator Pushes for Bitcoin and Crypto Payments for State Taxes: A Game Changer for Digital Currency Adoption

Chinese Stocks Surge: Which Sector Will Reap the Benefits?

Bitcoin's Rollercoaster September: Rally, Retreat, and Record Gains Ahead

Bitcoin ETFs Surge: Over $1 Billion in Inflows Amid Growing Institutional Interest

Snutx: Pioneering Compliance and Innovation in the Cryptocurrency Exchange Landscape

Caution Advised: China's Ex-Finance Minister Sounds Alarm on Cryptocurrency Risks

Other Latest News

Record $691 Billion Inflows: How Bitcoin ETFs and S&P 500 ETFs Are Shaping the Future of Investments

Ohio Senator Pushes for Bitcoin and Crypto Payments for State Taxes: A Game Changer for Digital Currency Adoption

Chinese Stocks Surge: Which Sector Will Reap the Benefits?

Bitcoin's Rollercoaster September: Rally, Retreat, and Record Gains Ahead

Bitcoin ETFs Surge: Over $1 Billion in Inflows Amid Growing Institutional Interest

Snutx: Pioneering Compliance and Innovation in the Cryptocurrency Exchange Landscape

Caution Advised: China's Ex-Finance Minister Sounds Alarm on Cryptocurrency Risks