By Steven M. Sears

If you believe that Bitcoin and other cryptocurrencies are a permanent part of financial markets, their recent weakness is a buying opportunity.

The crypto complex is under extreme pressure, and investor sentiment is verging on apocalyptic. The apparent cause of the distress is surreal.

The Bank of Japan reportedly might raise interest rates, which impacts crypto because many traders are said to borrow in yen to buy the assets. If rates rise in Japan, investors will presumably sell crypto to cover their yen loans.

Borrowing in one country with low rates to buy risk assets in another country is common among sophisticated investors, such as bank trading desks and hedge funds, but it's surprising to see the strategy cited for crypto's weakness.

While this dynamic plays out, aggressive investors who want to wager that fear turns to greed if Bitcoin prices keep declining can focus on Strategy and Coinbase Global. The trade's warning label: It's hard to know if buyers will step into the maw at sharply lower prices, let alone current levels.

The easiest way to add exposure to Strategy or Coinbase is by buying their stock. In volatile situations, consider "scaling" into positions, which means buying shares at different stages. If you want to buy 1,500 shares, buy 500 shares at market, another 500 at 5% lower, and another 500 at 10% lower.

An arguably smarter way to establish positions during the selloff, however, is in the options market. Here, investors can get paid just for agreeing to buy stocks at lower prices. And because Strategy and Coinbase options are priced with intense fear premiums, anyone who buys puts to hedge these stocks is paying top dollar. Aggressive investors who want to own the stocks can take advantage of that fact and sell puts to panicked investors.

Consider Strategy as a template for monetizing fear during the crypto decline. With the stock around $182, aggressive traders can sell the January $158 put for about $9.60, and the January $150 put for about $7.50.

If the stock rebounds, the put premium can be kept. If the stock is below the strike price at expiration, investors must buy the stock. During the past 52 weeks, Strategy has ranged from $166.01 to $457.22.

Puts increase in value when stock prices decline. But selling puts on stocks you want to own is a time-honored way to buy stocks at lower prices. Because the implied volatility of weak stocks is often elevated -- and crypto equities are outrageously high -- put sellers get paid a lot of money for taking on the risk.

We chose Strategy and Coinbase for simple reasons.

Michael Saylor, who runs Strategy, likely knows more than most people about Bitcoin. His company owns about 650,000 Bitcoin.

Coinbase, meanwhile, is a top crypto exchange. Exchanges typically benefit from volatility as fear and greed drive trading volumes, which generates money for exchanges.

The stocks have something else in common: They are technically broken. Both are trading below their 20-, 50-, 100-, and 200-day simple moving averages. Stocks trading below their 200-day moving average are considered to be "dead money."

Selling puts on either stock is out of sync with market sentiment. The trade expresses a view that the technical damage will be fixed if prices reach a level that attracts buyers.

If you're a believer in crypto, the options market will pay you to jump into the center of the crypto storm.

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(END) Dow Jones Newswires

December 05, 2025 21:30 ET (02:30 GMT)

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