Is Strategy still the best Bitcoin proxy trade?

Strategy’s long-running role as a high-beta proxy for Bitcoin is showing signs of strain, as hedge funds increasingly dominate trading and its largest shareholder trims exposure.

According to an Aug. 18 analysis by 10x Research, Strategy has been locked in one of its tightest ranges in years, with $360 repeatedly acting as a key support level. The company’s share price has tested this threshold several times in recent months, reflecting waning volatility and reduced investor conviction.

The report highlighted that Vanguard, Strategy’s largest shareholder, reduced its stake by 10% last quarter. While some long-only investors stepped in to buy, hedge funds have since taken control of market activity. This shift has raised the stakes for the $360 level, which could determine whether the stock breaks down further or stages a recovery.

Historically, Strategy has provided outsized exposure to Bitcoin (BTC) price swings, but that dynamic may be weakening. The report noted that when the stock lags Bitcoin by around 20% over a month, it has often presented a favorable entry point, but hedge fund-driven trading suggests sentiment is shifting.

Bitcoin treasuries lose their edge

10x Research compared Strategy’s performance to that of other Bitcoin treasuries and found that companies holding Bitcoin are losing their market appeal. Strategy’s shares are down 13% since mid-July, while Tokyo-listed Metaplanet has dropped 37% over the same period.

The analysis linked these declines to a collapse in volatility across both Bitcoin and Strategy, reducing the premium investors once paid for exposure. With less convexity in play, the ability of such companies to amplify Bitcoin’s upside has eroded, limiting their capital-raising power.

Meanwhile, new investment flows are being pulled toward Ethereum (ETH) treasuries and crypto initial public offerings, which are seen as offering fresher opportunities. According to 10x Research, this shift validates their July 19 call that Bitcoin treasuries would lose their edge as volatility compressed through the summer.

The report leaves investors with a key question: should re-entry depend on a specific price level such as $360, or on broader market conditions that could revive demand for treasury-style exposure?