Group One Trading Discloses 13.5% Stake in MicroStrategy

Chicago-based market maker Group One Trading has disclosed a 13.5% stake in MicroStrategy, according to a recent filing with the Securities and Exchange Commission [1]. The position consists of nearly 1.3 million shares, which were valued at approximately $237 million based on a share price of $188 [3].

Key takeaways

• Group One Trading, a market maker and liquidity provider, holds a 13.5% stake in MicroStrategy [1, 2].
• The position involves nearly 1.3 million shares, with reported valuations ranging between $237 million and $240 million [1, 2].
• MicroStrategy is widely viewed by investors as a proxy for Bitcoin due to its significant holdings of the cryptocurrency [1, 2].
• The company’s stock experienced a decline of more than 70% during 2022, mirroring the broader downturn in Bitcoin’s market price [1, 3].

Market Maker Position and Bitcoin Proxy Status

Group One Trading is a proprietary trading firm that functions as a liquidity provider for U.S. equity options and other securities [2]. While some reports describe the firm's acquisition as a direct purchase of shares, other sources characterize the position as an options-based stake [1, 2].

MicroStrategy has become a significant focal point for investors seeking exposure to Bitcoin, particularly as formal avenues for direct investment, such as a spot Bitcoin ETF, have remained limited in the United States [2]. The company’s corporate strategy is heavily tied to the cryptocurrency, with reports indicating the firm holds over 131,000 to 132,500 Bitcoin [1, 2]. This strategy has faced challenges, including a $1 billion impairment loss recorded in the second quarter of 2022 [2]. Additionally, while the company has maintained a long-term commitment to its Bitcoin holdings, it executed a sale of 704 Bitcoin late in 2022 to secure a tax benefit, later repurchasing the coins [2].

Market Performance and Outlook

The valuation of MicroStrategy’s stock has historically tracked closely with the price of Bitcoin [1]. During 2022, as Bitcoin’s price fell from approximately $48,000 in March to $16,500 by the end of the year, MicroStrategy’s stock price dropped by more than 70% [1, 3].

Following this period of volatility, the company has seen a recovery in early 2023. Alongside a modest increase in the price of Bitcoin, MicroStrategy shares rose 30% year-to-date as of the January 2023 disclosure, which included a 7.7% increase in a single day of trading [1, 3].

Why it matters

The disclosure highlights the continued role of MicroStrategy as a primary vehicle for institutional and market-maker interest in the cryptocurrency sector. Because the company holds a massive amount of Bitcoin, its stock performance remains tethered to the digital asset's market movements. For market makers like Group One, holding a significant stake in such a proxy allows for liquidity provision and hedging strategies in an environment where direct Bitcoin investment products remain restricted for many U.S. investors. The firm's move reflects the ongoing institutional engagement with Bitcoin-linked equities despite the significant price corrections observed throughout the previous year.