Wall Street hedges against dropping Bitcoin price with a Strategy short

Safeguarding your position is sacred for Wall Street traders. “If there’s blood in the streets, buy houses,” is the oldest safety proverb for those investors. Another one claims is that you should buy gold when war threatens. The latest is that you should short Strategy when your Bitcoin investments decline. This is because Strategy, Michael Saylor’s company, is the biggest Bitcoin whale of them all. Their share price continues to decline because of this new proverb.

Position

While smaller investors can easily trade derivatives or futures to hedge against a potential Bitcoin price decline, for Wall Street firms it’s a different story altogether. Those positions are too small for them, and their only option to hedge their billion-dollar investments in Bitcoin or Ethereum is to short a major U.S. stock that’s correlated with the Bitcoin price. Michael Saylor’s strategy has therefore become Wall Street’s favourite hedge against the current falling Bitcoin prices.

Next time someone says MicroStrategy is a Ponzi, play them this Saylor Thug Life Mic Drop moment 👀 pic.twitter.com/7FdOVbGgba

— Bitcoin Teddy (@Bitcoin_Teddy) November 24, 2025

For a major Wall Street bank, a falling Bitcoin price lasting several weeks means a loss of several million dollars, and the volatility of that fall is far too difficult to protect against. Although most of these banks believe Bitcoin will rise in the long run, they need to protect themselves against short-term losses. For them, Strategy stock, whose price is closely linked to Bitcoin’s performance, is the ultimate safety hedge during a Bitcoin downturn. The unfortunate consequence of this is that Strategy stock has already fallen by some 50% this year, while Bitcoin has only fallen by 7% YTD.