Bitcoin boom is pushing more investors to explore high risk, high reward products to maximize profit.
The broader crypto market is expectant as Bitcoin edges closer to the long-awaited $100,000 mark. This milestone has sparked interest among traders looking to grow their capital.
To achieve this, traders have turned to the Defiance Daily 2X Long MSTR ETF, a leveraged fund tied to MicroStrategy’s stock. As Bitcoin BTC $92 452 24h volatility: 1.1% Market cap: $1.84 T Vol. 24h: $36.68 B climbs, traders turn to this ETF and its options to boost profits, embracing the high-risk, high-reward trend in the market.
Bitcoin Surge Drives Traders to Take Riskier Bets
Bitcoin’s rapid surge toward $100,000 has sparked a rise in trading activity. Many want higher returns through riskier, leveraged products.
Among these, the Defiance Daily Target 2X Long MSTR ETF, trading as MSTX on the Nasdaq, has gained significant traction. It is 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 tied to Bitcoin due to its massive holdings, has drawn heavy attention, pushing MSTX into the spotlight. Recently, as MicroStrategy shares jumped 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 ascent, 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.
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