January 3, 2025 saw a marked shift in market sentiment surrounding MicroStrategy (MSTR), a company that has invested heavily in Bitcoin (BTC). Unlike before, traders are now less enthusiastic about buying call options. Statistics show that MSTR’s put-call skew over the last 250 days has moved from -20% to zero, indicating a greater degree of equivalence between call options and put options.
MSTR’s stock price has plunged more than 44% from a high of $589 to $289, reflecting a sharp decline in value and a loss of investor confidence in the company’s Bitcoin leverage strategy. Analysts say the narrative supporting MSTR’s Bitcoin accumulation strategy is losing traction as other companies join in, albeit on a smaller scale.
Despite major Bitcoin acquisitions since 2020, MSTR's recent underperformance shows a lack of confidence from investors, who prefer to buy Bitcoin directly at a low price rather than through MSTR's high valuation.
Against this backdrop, confidence in crypto ETFs has also been tested as BlackRock’s iShares Bitcoin Trust (IBIT) saw its biggest drop since its launch last year, with $330.8 million (equivalent to more than 3,500 Bitcoin) withdrawn on January 2, 2024. This withdrawal surpassed the previous record of $188.7 million on December 24, 2023.
Despite the outflows over three trading days, the fund remains one of the top three U.S. funds by inflows in 2024, with $37.2 billion, behind only Vanguard’s S&P 500 Index Fund and the iShares Core S&P 500 ETF. In contrast, funds like Bitwise, Fidelity, and Ark 21Shares saw significant inflows on the same day.
Looking ahead to 2025, ETF Store President Nate Geraci has forecasted potential developments in crypto ETFs, including the combination of Bitcoin and Ether spot ETFs and the possible approval of a Solana spot ETF. This shows that the crypto market is entering a new phase of development with various opportunities and challenges.
