Group One “Beneficially” Owns 13% of MicroStrategy in Big Bitcoin Bet – Is the BTC Bottom In?

Chicago-based trading firm Group One Trading has taken a massive bet on bitcoin (BTC) by taking a “beneficial” position representing 13% of bitcoin bull Michael Saylor’s company MicroStrategy.

The bet on MicroStrategy’s stock included bullish options that gives the trading firm the right to buy more than 1.3 million shares of MicroStrategy, according to an SEC filing.

“The number of Shares reported as beneficially owned includes options to buy 1,302,900 Shares,” the filing said. Including the stock options, Group One now “beneficially” owns 13% of MicroStrategy, it added.

Unusual move

Group One is a trading firm working in the US stock options market, where it generally acts as a market maker.

It is unusual that large market makers take directional bets on assets like bitcoin, and it is therefore possible that the position was entered as a hedge against short exposure to bitcoin that the firm has elsewhere. However, it is also possible that Group One currently sees major upside potential for the number one crypto, and therefore chose to take a bullish bet on MicroStrategy.

Neither Group One nor MicroStrategy has commented on the move.

On Twitter yesterday, Michael Saylor expressed his usual bullishness on bitcoin:

#Bitcoin is the Cure. pic.twitter.com/z9fsV8gCiT

— Michael Saylor⚡️ (@saylor) January 10, 2023

A de facto bitcoin ETF

With its massive bitcoin holding, MicroStrategy’s share price generally follows that of BTC. The company has thus transformed itself to become a de facto bitcoin exchange-traded fund (ETF), and an ideal investment tool for institutions who either can’t or don’t want to hold BTC directly.

MicroStrategy made its latest purchase of bitcoin in December, raising its total holding to 132,500 BTC as of December 27 last year.

The coins held by the company were purchased at an aggregate price of $4.03bn, with an average price per coin of $30,391, a filing from the company at the time said.

As of Wednesday, the total market value of MicroStrategy’s coins stood at approximately $2.31bn.