Traders earned 10x on fake news that Strategy sold bitcoin
Traders on a binary options website Polymarket earned 10x their money this morning on a rumor that Michael Saylor’s Strategy (formerly MicroStrategy) had sold some of its bitcoin (BTC).
Starting the day with an odds rate as low as 3% that Strategy would sell any of its BTC by January 1, 2026, traders panicked into accepting bets at up to 45% odds during Nasdaq’s pre-market trading hours.
At the same time, shares of MSTR were tanking to a pre-market low near $193. By the 9:30am New York open, shares had recovered above $200.
The source of the rumor was a disingenuous claim based on a screenshot from blockchain analytics website Arkham Intelligence.
Arkham simply displayed transfers of BTC in red font, which readers interpreted as negative. Worse, they assumed that Strategy’s transfers into a crypto exchange somehow indicated sales.
Saylor quickly clarified that Strategy hadn’t sold any BTC and that the transfers were simply movements to an exchange — not sales at the exchange.
The concern about sales occurred during an emotional peak in the crypto sector which has shed $1 trillion in market capitalization over the last five weeks. Year-to-date, BTC is flat, shedding its entire gain from $126,000 back to $97,000.
Strategy underperforming bitcoin itself
Strategy has fared even worse, down 29% since the start of the year. As covered previously by Protos, Strategy’s market cap has fallen below the value of its BTC holdings.
Its common stock MSTR has underperformed BTC for 28 months.
Read more: How Jim Chanos outplayed Michael Saylor: short MSTR, long BTC
Tracking the purchases and sales of Strategy would be easier if Saylor would agree to publish the company’s list of wallets or a proof of reserves attestation. Unfortunately, he’s repeatedly refused those requests from his shareholders, citing mostly security concerns.
As the price of BTC and MSTR have declined, Saylor posted an AI rendering of a life raft leaving a burning ship with rallying cry, “HODL.”
After he clarified that Strategy hadn’t sold any BTC, the odds rate at which Polymarket traders would accept bets fell back to its pre-panic levels.
Traders are back to 4% confidence that the company will sell any BTC this year.
As with most binary options websites like so-called prediction markets, odds rates don’t necessarily indicate the odds of the event actually occurring.
Generally speaking, the binary options industry has a storied history of financial misconduct and intermittent compliance with regulations. Moreover, markets are generally thinly traded and therefore easy to manipulate.
This particular market posted transaction volumes of a mere $1 million.
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