Saylor's Bitcoin Risk Pushes Traders to Ethereum, Hyperliquid

Institutional clients are running a "short crypto, long AI" trade, according to FalconX Head of Trading Strategy Hassan Baseri. The reason is not just rotation toward artificial intelligence stocks. It's a specific fear: Michael Saylor might sell Bitcoin to support Strategy's credit structure, particularly its preferred stock, Stretch.

Baseri argued Bitcoin may need to retest the $55,000 area before confidence returns, especially if Strategy sells some Bitcoin to bolster reserves and calm fears around its dividend obligations. He also warned that U.S. midterm elections could become a risk if Democrats gain ground and slow or reverse crypto-friendly regulatory momentum.

Within crypto, traders are watching Ethereum and Hyperliquid closely, Baseri said. Ethereum has historically seen long periods of weak price action, but "when it does rally, it will be very violent," he said. Several FalconX clients are expressing bullish views through derivatives, including risk-reversal trades that involve selling downside puts and buying upside calls.

Hyperliquid is drawing strong institutional interest because the market trusts the project's team to protect token value through fee buybacks and disciplined ecosystem development, Baseri said. Its ability to support trading in pre-IPO assets such as SpaceX and Anthropic could keep demand strong.

AlphaScala's gauge of MSTR scores 25 out of 100, a Weak label that reflects the balance sheet strain Baseri described.

FalconX clients are executing risk-reversal trades on Ethereum, buying calls and selling puts, Baseri said.