Is Strategy Stock the Preferred Hedge Against Crypto Losses? Tom Lee Thinks So

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Is Strategy Stock the Preferred Hedge Against Crypto Losses? Tom Lee Thinks So Strategy’s 650,000 BTC holdings make it a ‘pressure valve’ for the broader market, said the Bitmine Immersion chairman. By Helene Braun | Edited by Stephen Alpher Nov 22, 2025, 5:00 p.m. (Ilya S. Savenok/Getty Images for BitMine) What to know : Strategy (MSTR) stock has dropped 43% as institutional crypto investors use it to hedge losses amid limited on-chain options. Tom Lee of Bitmine Immersion says MSTR acts as a proxy for bitcoin due to its liquidity and large BTC holdings, making it the market’s preferred hedge. Crypto market liquidity remains weak post-October crash, forcing traders to short MSTR in the absence of robust crypto-native hedging tools. Strategy (MSTR) has become the go-to tool for crypto investors trying to manage risk, according to Tom Lee, chairman and CEO of Bitmine, partly explaining its 43% drop over the past month. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms of use and privacy policy . “[Strategy] is probably the most important stock watch right now, because that is the bitcoin proxy, it’s the most liquid name,” Lee said in an interview with CNBC on Thursday. With limited options to hedge losses directly in crypto markets, institutional traders have turned to shorting Strategy shares instead. The company holds nearly 650,000 bitcoin BTC $ 84,569.00 , making its stock price closely tied to bitcoin’s performance. “It seems to me that in the crypto world when they’re trying to hedge their loss in bitcoin and ethereum they can’t find any other way to hedge it except shorting the liquid stocks that it proxies and that’s the MicroStrategys,” Lee said. He added that crypto-native hedging tools, like derivatives on bitcoin and ether ETH $ 2,759.61 , aren’t liquid or deep enough for major players. “Anyone who has a sizable bitcoin long position … they have very limited ability to hedge it in crypto derivatives,” he said. But Strategy, he explained, offers a workaround. “Somebody can use [Strategy’s] option chain which is so liquid to hedge all of their crypto.” In effect, he said, “[Strategy] is essentially absorbing all the hedging pressure that the crypto industry is trying to do to protect their longs.” Lee also pointed to the lingering effects of the Oct. 10 market crash, which wiped out $20 billion in value and disrupted liquidity across exchanges. “It really crippled market makers,” he said, describing them as the “central bank” of crypto. Since then, cracks in the system have remained, with liquidity still thin across altcoins, miner stocks and bitcoin proxies like Strategy. MSTR has been among the hardest hit in the current downturn, which Lee believes is partly due to it serving as a pressure valve for the rest of the market. He believes crypto’s market plumbing remains fragile, and Strategy’s role as a hedge is a sign of deeper structural issues. Strategy More For You Protocol Research: GoPlus Security By CoinDesk Research Nov 14, 2025 Commissioned by GoPlus What to know : As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M. GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month. Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B. View Full Report More For You Coinbase 'Negative Premium' at Widest Level since Q1, Signalling Weak U.S. Demand By James Van Straten | Edited by Aoyon Ashraf 1 hour ago Bitcoin is on track for its worst weekly performance since March, while U.S. demand indicators weaken as the Coinbase premium declines and spot ETFs reach a record volume. What to know : Coinbase’s bitcoin Premium Index hit a -0.15% divergence, its widest discount to global markets since Q1, signalling persistent U.S. institutional caution. Spot bitcoin ETFs saw $238.4 million of inflows and a record $11.5 billion in trading volume on Friday, hinting at potential capitulation after a 36% market correction. Bitcoin is heading for its worst week since March with an 11% slide. 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