protos.com
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.