Bitcoin's Record-Breaking Rally Lifts Options Tied to Marathon Holdings, Coinbase, MicroStrategy
Bitcoin's ascent above $84,000 is boosting the appeal of crypto-related stocks as Wall Street expects improving regulatory environment under the incoming Trump administration.
The world's largest crypto currency jumped as much as 6.3% to a record $84,986.15 Monday, extending this year's gains to more than 100%. $Marathon Digital Holdings Inc(MARA)$
Marathon Holdings attracted the heaviest options trading among the crypto related stocks, with almost 600,000 contracts changing hands across 15 expiration dates that stretch through Jan. 15, 2027. in New York Monday. The seven most active contracts are call options giving the holders the right to buy the stock for prices ranging from $20 to $30 by the end of the week, as the stock rally pushed many of them in-the-money days before expiration.
Coinbase climbed shares climbed 77% this month alone, with the biggest chunk of those gains coming in after former President Donald Trump was declared the winning of the presidential race, beating Vice President Kamala Harris. The crypto platform has been engaged in a court battle with the Securities and Exchange Commission. The rally came amid speculations that SEC Chair Gary Gensler will be removed from his post once Trump takes over as the 47th president of the U.S. in January.
The most active Coinbase contract is the call option that gives the holders the right to buy the stock at $350 in four days. Coming in second is the $270 call that just last Friday, was still out-of-the-money. That changed in less than a trading day, with the contract price soaring more than 400% after a $55 jump in the share price that pushed the call option in-the-money.
More than 593,000 contracts changed so far, landing Coinbase in the sixth most traded stock option, behind $Tesla (TSLA.US)$, $NVIDIA (NVDA.US)$, $Palantir (PLTR.US)$, $SoFi Technologies (SOFI.US)$ and Marathon Holdings.
$MicroStrategy (MSTR.US)$ was closely behind, with 557,580 contracts traded so far. The top two most active contracts are call options that give the holders the right to buy MicroStrategy shares at $325 and $330 each. While those calls are still out of the money, the share price gains increased the probability that they could be in-the-money over the next four days.
The software company has seen its valuation quadruple this year, as investors favored its business strategy which includes buying Bitcoin. MicroStrategy disclosed Monday that it purchased $2.03 billion worth of the crypto currency Oct. 31 through yesterday.
Those 27,200 Bitcoins were bought using the money it raised from issuing and selling its shares, according to a press release Monday. The purchase was at an average price of $74,463, before the price climbed more than $10,000 from that level. That bolstered the company's unrealized gains. As of yesterday, the company and its holdings own 279,420 Bitcoins which were bought at an average price of about $42,692, according to its press release. The value of its holdings has almost doubled.
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