Traders are increasingly using leverage on top of the already leveraged 2x long MicroStrategy ETF (MSTX), reflecting a heightened risk appetite in the crypto market. As Bitcoin approaches the $100,000 mark, the MSTX ETF, which aims to deliver twice the daily performance of MicroStrategy's share price, surged 20%, peaking at over $180. A significant rise in options trading for MSTX, particularly for deep out-of-the-money call options at the $230 strike price, indicates extreme bullish sentiment among investors. This demand, covering multiple expiration dates, underscores a speculative excess reminiscent of retail investor mania. Concurrently, expectations of friendlier regulations under the incoming administration and potential Federal Reserve rate cuts have contributed to Bitcoin's rise, which recently reached new highs above $97,000. MicroStrategy remains the largest public holder of Bitcoin, further fueling investment in the leveraged ETF. The article highlights the potential risks associated with such speculative trading behavior, often leading to market corrections.

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