In the whirlwind world of cryptocurrency, the debut of BlackRock’s iShares Bitcoin Trust (IBIT) options on November 19 last year marked a pivotal moment. Trading volumes soared, surpassing $2 billion on the first day alone. Interestingly, this frenzy coincided with Strategy’s (MSTR) mNAV (multiple to net asset value) hitting a cycle peak of 3.141 on November 20, just as Bitcoin flirted with the $100,000 mark, and MSTR’s stock soared to an all-time high of $540. Fast forward to today, and the landscape looks markedly different—MSTR has since plummeted by 40%, with its mNAV compressing to 1.55.
The Divergence of MSTR and IBIT
MSTR has long served as a unique trading vehicle, offering investors a tantalizing mix of equity exposure and Bitcoin’s notorious volatility. In contrast, IBIT’s launch provided investors with direct exposure to spot Bitcoin, creating a clear demarcation between the two. According to crypto analyst Jane Doe, “MSTR gives traders a chance to play both sides, leveraging Bitcoin’s moves while also benefiting from equity market dynamics. IBIT, on the other hand, is purely a Bitcoin play.” This difference has allowed MSTR to outshine IBIT since the launch of spot Bitcoin ETFs in January 2024. MSTR has surged over 515%, leaving IBIT’s 128% gain in the dust. For more insights on MSTR’s strategic outlook, see Strategy’s Saylor Talks About Future Amid Bitcoin Bloodbath.
The Role of Volatility
But here’s the catch: Bitcoin’s implied volatility is currently sitting below 40, a remarkably subdued level. Implied volatility is a vital metric, reflecting market expectations of future price swings. With such low volatility, traders find less incentive to engage in leveraged or options-based strategies. “For MSTR and similar leverage products to regain their former glory, Bitcoin’s volatility would need to ramp up significantly,” observes crypto strategist John Smith. In the absence of wild price swings, the allure of leveraged plays diminishes, leaving MSTR at a crossroads.
Historical Context and Market Trends
Looking back, the synchronized peaks of IBIT’s trading volume and MSTR’s mNAV last November were no mere coincidence. At that time, Strategy held 331,200 BTC, representing a substantial increase from previous holdings. The rapid expansion in its Bitcoin reserves fueled investor optimism, driving up MSTR’s valuation. However, as investor sentiment shifted and Bitcoin’s price stabilized, MSTR’s appeal waned, resulting in the sharp decline we’ve seen since. This aligns with on-chain data suggesting potential explosive cycle peaks, as discussed in Bitcoin’s Next Stop $183K? On-Chain Data Points to Explosive Cycle Peak.
Future Implications
As we stand on the cusp of the final quarter of 2025, questions linger about the path forward for both MSTR and IBIT. With Bitcoin’s implied volatility at historically low levels, will we see a resurgence in leveraged trading strategies? Or will the market continue to favor direct Bitcoin exposure through vehicles like IBIT? The answer remains uncertain, but one thing is clear: the interplay between volatility and trading strategies will be a key factor shaping the crypto landscape in the coming months.
In the meantime, investors and analysts alike will be watching closely, ready to pivot as market dynamics evolve. Whether MSTR can reclaim its former heights or whether IBIT will emerge as the preferred choice for Bitcoin exposure, the crypto market never fails to keep us on our toes. As always, the only certainty is change.
Source
This article is based on: Strategy’s Cycle Peak Aligned with IBIT Options Debut Last November
Further Reading
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- Bitcoin and Central Bank Liquidity: The Hidden Correlation Driving Market Cycles
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
