Strategy’s traditional role as a high-beta proxy for Bitcoin appears to be under pressure, as hedge funds increasingly dominate its trading and its largest shareholder scales back exposure.
An August 18 analysis by 10x Research noted that Strategy has been trading within one of its tightest ranges in years, with $360 repeatedly acting as a key support level. The stock has tested this threshold multiple times in recent months, signaling declining volatility and waning investor conviction.
The report highlighted that Vanguard, Strategy’s largest shareholder, trimmed its position by 10% last quarter. While some long-only investors moved in to buy, hedge funds have since taken the lead in market activity. This shift has made the $360 support level more critical, as it could dictate whether the stock slips further or mounts a recovery.
Historically, Strategy has delivered outsized exposure to Bitcoin’s price swings, but that dynamic may be softening. According to the report, the stock has often offered an attractive entry point when trailing Bitcoin by roughly 20% over a month, yet the rise of hedge fund-driven trading indicates that sentiment is changing.
Bitcoin Treasuries Are Losing Their Advantage
10x Research compared Strategy’s performance with other Bitcoin treasuries and found that companies holding Bitcoin are losing their market appeal. Strategy’s shares have fallen 13% since mid-July, while Tokyo-listed Metaplanet has plunged 37% over the same period.
The analysis attributed these declines to a collapse in volatility across both Bitcoin and Strategy, which has reduced the premium investors once paid for exposure. With less convexity in play, these companies’ ability to amplify Bitcoin’s upside has diminished, limiting their capacity to raise capital.
Meanwhile, new investment flows are shifting toward Ethereum treasuries and crypto IPOs, seen as offering fresher opportunities. According to 10x Research, this trend validates their July 19 prediction that Bitcoin treasuries would lose their edge as volatility compressed over the summer.
The report poses a key question for investors: should re-entry hinge on a specific price level, such as $360, or broader market conditions that could reignite demand for treasury-style exposure?
