Bitcoin's brutal sell-off sparks a flurry of trading in related stocks, including one big bullish bet

• A trader executed a $56 million diagonal call spread on MicroStrategy, selling August 125-strike calls and buying June 180-strike calls, profiting most if the stock remains flat or declines slightly
• A separate $21 million bullish bet on Coinbase involved selling June calls for $4.9 million and buying August 160-strike calls for $26 million, requiring the stock to rise above $183.40 for profitability
• FundStrat's Tom Lee remains optimistic on bitcoin despite the downturn, citing the cryptocurrency's 'proof of work architecture' and positioning it as 'the soundest money' amid AI-driven uncertainty in traditional systems

Summary

Bitcoin Market Update:

Bitcoin recovered above $60,000 on Monday after briefly falling below that threshold on Friday. The cryptocurrency has declined 27% in 2026 and sits approximately 50% below its all-time high. Despite the downturn, traders remain active in crypto-related stocks with significant options activity.

Key Trading Activity:

MicroStrategy (MSTR): A trader executed a $56 million diagonal call spread, selling 29,425 contracts at the 125-strike (August 21 expiration) and buying 180-calls (June 18 expiration). This strategy profits from time decay and sideways movement. The trade comes after Strategy's recent bitcoin sales—its first in years—rattled investors.

Coinbase (COIN): A more bullish $21 million position was established using a diagonal strategy. The trader sold 10,990 June 18 calls for $4.9 million and purchased $26 million in August 21 160-calls. This trade requires Coinbase to move above $183.40 per share by August expiration for profitability.

Market Outlook:

FundStrat's Tom Lee remains optimistic, stating bitcoin "remains the soundest money" amid AI-driven disruption of traditional systems. He emphasized the resilience of bitcoin's proof-of-work architecture as critical to potential recovery.

Bottom Line:

While bitcoin faces significant headwinds with steep losses in 2026, sophisticated traders are deploying substantial capital through complex options strategies, with mixed directional bets suggesting uncertainty about near-term price direction but potential for longer-term recovery.