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MicroStrategy’s Bitcoin Strategy – How Amplifying Volatility Generates Arbitrage Opportunities

MicroStrategy's Bitcoin Strategy - How Amplifying Volatility Generates Arbitrage Opportunities

According to PANews, Shenyu, co-founder and CEO of Cobo, revealed on the X platform that MicroStrategy (MSTR) has devised a clever strategy. This strategy amplifies Bitcoin’s volatility by 2.5 times, affecting the US stock market. Institutional investors leverage this heightened volatility for arbitrage opportunities, securing short-term gains.

MSTR raises capital through convertible bonds and ATM offerings to accumulate substantial amounts of Bitcoin. While ordinary shareholders face significant stock price fluctuations and short-term decline risks, they also benefit from increased Bitcoin holdings per share, known as ‘Bitcoin yield.’ Bitcoin holders profit from continuous market capital inflows and rising Bitcoin prices.

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