Bitcoin Sell-Off Sparks Trading Frenzy in Related Stocks

Bitcoin's recent plummet has sent shockwaves through the cryptocurrency market, causing a flurry of activity among related stocks. Despite the decline in value, traders are showing no signs of backing away from this space.

The iShares Bitcoin Trust ETF (IBIT) was one of the top 20 most popular tickers in the options market by volume on Monday, with two of the top 15 largest options trades by dollar amount being in Strategy and Coinbase.

One notable trade in Strategy involved a trader selling 29,425 of the 125/180-call diagonals, collecting approximately $56 million in the process. This strategy is most profitable if Strategy shares drop and stay below $125 through August expiration.

A similar diagonal strategy was used in Coinbase, where one trader bet around $21 million on a sizable comeback for the hard-hit exchange stock.

According to Tom Lee, chairman of BitMine and head of research at FundStrat, the resilience of bitcoin's proof-of-work architecture will be key to any crypto comeback.