Strategy's Bitcoin Bet Faces Earnings Test: Double Down or Hedge With 2X ETFs

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Strategy Inc. (MSTR) reports Q3 2025 earnings on October 30th, with traders watching whether the business intelligence firm turned Bitcoin treasury company can maintain its wild momentum. The volatile stock has become a proxy play on Bitcoin itself.

MSTR shares have risen 30% over the past year, exceeding the S&P 500's gains in the same period. This extraordinary performance reflects Strategy's transformation into the world's largest corporate Bitcoin holder, with over 640,000 Bitcoin on its balance sheet.

For active traders looking to capitalize on Strategy's notoriously volatile earnings moves, GraniteShares' 2x Long and 2x Short MSTR Daily ETFs, launched in June 2025, provide tactical tools to trade the stock's explosive swings without traditional margin requirements.

Q3 Earnings Expectations and Volatility

Wall Street expects Strategy to report a loss of $0.11 per share in Q3, a massive improvement from the $1.56 loss in the same quarter last year. This reflects both operational improvements and Bitcoin accounting impacts.

The company's earnings history shows extreme volatility, with a stunning 27,267% surprise in Q2 when it reported $32.60 per share versus expectations of a $0.12 loss. This dramatic beat was driven by Bitcoin accounting gains during the crypto rally.

Options markets are pricing in significant movement for MSTR. The stock has averaged a 4.92% move on its last four earnings reports, though individual moves have ranged from -8.77% to +3.35%.

Recent Stock Action and Bitcoin Correlation

MSTR’s correlation with Bitcoin price movements has intensified as the company's Bitcoin holdings now dwarf its software business value.

Recent volatility has been extreme, with 71 moves greater than 5% over the past year. Just last week, the stock dropped 6.1% when Bitcoin fell below $112,000, wiping out $140 billion in crypto market value.

Analyst sentiment remains bullish overall, with 13 analysts covering the stock showing a "Strong Buy" consensus. However, the wide price target range from $175 to $705 reflects disagreement about valuation in this unique Bitcoin-leveraged equity.

Key Factors for Q3 Results

Several elements will drive the stock's reaction when Strategy reports:

• Bitcoin Holdings Update: Any new Bitcoin purchases and the current value of holdings matter most for price action.
• Accounting Treatment: How Bitcoin gains/losses flow through the income statement under new accounting rules.
• Software Business Health: Legacy analytics business performance, though increasingly irrelevant to valuation.
• Bitcoin Strategy Commentary: CEO Michael Saylor's outlook on future Bitcoin acquisitions and financing plans.
• Leverage and Liquidity: Updates on convertible debt and ability to continue aggressive Bitcoin accumulation.
• Regulatory Outlook: Any comments on potential government Bitcoin policies or strategic reserve discussions.

Trading MSTR Earnings With GraniteShares ETFs

MSTR routinely sees significant movement when its earnings reports are released, creating significant opportunities for positioned traders. GraniteShares' Leveraged ETFs let traders amplify or hedge MSTR's price action.

Bullish Play: MSTP

GraniteShares 2x Long MSTR Daily ETF (MSTP) allows traders to double their exposure to potential Strategy gains. MSTP seeks 200% of MSTR's daily performance through financial instruments.

• Targets 200% of MSTR's daily performance
  • When Strategy rises 1%, MSTP aims for a 2% gain (before fees)
  • When Strategy falls 1%, MSTP typically drops 2% (before fees)
• Perfect for traders expecting Bitcoin rally continuation or positive earnings surprises
• Captures Strategy's leveraged Bitcoin exposure with additional leverage
• Expense ratio: 1.50% (after fee waiver)
• Average daily volume: 22,500 shares
• Designed for active traders comfortable with extreme volatility

Bearish Protection: MSDD

GraniteShares 2x Short MSTR Daily ETF (MSDD) provides inverse exposure to Strategy without requiring short-selling. This feature helps traders in retirement accounts where IRA and 401(k) rules prohibit traditional shorting.

• Delivers inverse (-2x) daily performance versus MSTR
  • When Strategy drops 1%, MSDD aims for a 2% gain (before fees)
  • When Strategy rises 1%, MSDD typically falls 2% (before fees)
• Valuable for traders worried about Bitcoin correction or earnings disappointment
• Allows retirement account holders to make bearish trades on MSTR
• Expense ratio: 1.50%
• Average daily volume: 12,600 shares
• Functions as portfolio insurance given MSTR's extreme volatility

Both MSTP and MSDD reset their exposure daily and work best as short-term trading tools rather than buy-and-hold investments. These products require active oversight and are designed for traders who understand leverage effects and daily rebalancing dynamics.

With Strategy essentially operating as a leveraged Bitcoin fund disguised as a public company, these 2x leveraged ETFs provide traders powerful tools to capitalize on whatever direction the stock takes on October 30th.

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