Disclaimer: The analyst who wrote this article owns shares in Strategy.

Strategy’s (MSTR) aggressive bitcoin BTC acquisition strategy has dramatically boosted the value of its convertible debt.

With bitcoin steady near its record price and the company’s shares rebounding toward $450, five of the six bonds outstanding are deep in the money, meaning the stock price exceeds their conversion prices. Only the 2029 note, with a high $672.40 conversion price, remains out of reach.

The Tysons Corner, Virginia-based company issued convertible notes totaling $8.2 billion in notional principal with ultra-low average coupons of just 0.421%. The bonds, which mature between 2028 and 2032, carry a set price based on MSTR and BTC levels at the time of issues at which the debt can turn into the common stock.

MSTR stock has rebounded from as low as $235 three months ago and is within sight of late last year’s $543 record. The rally has pushed the bonds’ market value to $13.4 billion, roughly $5.2 billion above their notional value. The premium reflects how much investors are willing to pay in secondary markets, driven by the bonds’ potential to convert into valuable equity.

Of late, however, Strategy has paused issuing new convertible notes. That may be due to more cautious sentiment as reflected in the options market.

As of July 15, MSTR’s implied volatility sits at 53.1%, well below past highs above 200%. Implied volatility is an indication of how much the options traders believes the stock will move in the future based on their market positioning.

Open interest remains healthy at over 2.4 million contracts, but both the open interest put-call ratio (0.93) and the volume put-call ratio (0.62) indicate neutral sentiment, suggesting traders are not aggressively betting on a major surge in the stock. A put is a cautious position that offers protection against price declines in the underlying asset while a call is a bullish instrument that allows traders to profit when the price rises.

Additionally, trading volume is just 20% of its 30-day average, hinting at reduced speculative interest.

This muted options activity implies that while MSTR’s price is high enough to put five of the six convertible bonds deep in the money, there may not be the same frothy market enthusiasm that allowed the company to issue convertibles at ultra-low coupons and favorable terms.

Investors might demand higher yields or lower conversion prices for any new issuance, which could dilute existing shareholders sooner.

Crypto exchange BigONE has confirmed a $27 million breach stemming from a hot wallet exploit on July 16 and states that all user funds will be fully reimbursed.

In an official statement, the exchange said it detected “abnormal movements” tied to a third-party attack and has since identified and contained the vector. All private keys remain secure, and no additional losses are expected.

BigONE is working with blockchain security firm SlowMist to track the stolen assets, with fund tracing already underway across Bitcoin, ethereum, Tron, Solana, and BNB Chain, per a release.

What Was Stolen?

The stolen tokens span across major and minor assets, including:

• 120 BTC
• 350 ETH
• 9.5B SHIB
• 7.1M USDT (multi-chain)
• 538,000 DOGE
• 1,800 SOL
• 1 WBTC
• 20,730 XIN
• 15.7M CELR
• 25,487 UNI
• 16,071 LEO

BigONE said user balances are safe, and all losses will be covered in full using a combination of internal reserves (BTC, ETH, SOL, USDT, XIN) and external borrowing to restore liquidity for niche tokens.

Deposits and trading are expected to resume within hours, but withdrawals will be delayed until further security reinforcements are complete.

“We sincerely apologize for the impact this incident may have caused,” the team wrote. “All investigation progress and handling results will be communicated with full transparency.”

The incident marks yet another major exchange hack in 2025, pushing total crypto exploit losses beyond $2.1 billion for the year.

Read more: Crypto Investors Lost $2.5B to Hacks and Scams in the First Half of 2025: Certik

Bitlayer’s BitVM Bridge launched its mainnet on Wednesday, enabling bitcoin (BTC) liquidity for decentralized finance through a trust-minimized framework.

The bridge keeps users’ BTC safe by locking it in the BitVM smart contract that operates under the assumption that at least one honest market participant exists, ready to expose malicious attempts to move funds.

This trust-minimized setup starkly contrasts traditional custodians that involve centralized custody or distributed custodianship.

«Over the past year, we’ve dedicated significant resources to developing the BitVM bridge, and we’re thrilled to finally deliver this milestone to the community,» Bitlayer co-founder, Kevin He said in a press release shared with CoinDesk.

«Post-mainnet deployment, our focus shifts to scaling asset compatibility and deepening integration with additional blockchain networks,» He added.

YBTC, a gateway to BTC DeFi

Central to Bitlayer is YBTC, a token that directly represents the user’s locked bitcoin. Its value is pegged 1:1 with BTC, and it opens decentralized finance to BTC holders looking to generate additional yield by allowing them to stake, lend, borrow, trade and provide liquidity across multi-chain decentralized exchanges.

The token’s security stems directly from the transparent and verifiable BitVM smart contract – unlike wrapped BTC (such as WBTC), which relies on a trusted central entity to hold the actual BTC.

Note that YBTC is distinct from Bitlayer’s native token, BTR, which is used for governance, fees and staking within the ecosystem and is slated to be listed on major centralized exchanges.

Front-and-reclaim model

Typically, eliminating centralized custodians implies longer waiting times, especially in the case of fraud-proof systems like Bitlayer. Here, while transactions are assumed to be honest, anyone watching can step in to prove if something went wrong.

To allow enough time for these crucial security checks, there’s a built-in waiting period, typically seven days, during which a fraudulent transaction could be challenged. This can lead to longer withdrawal times.

However, Bitlayer employs an innovative «front-and-reclaim» model, transferring the waiting period to specialized brokers or third-party liquidity providers. These entities provide the withdrawn BTC from their own funds to users within approximately one hour. Meanwhile, they wait for their original seven-day security period to end before getting their funds back from the smart contract.

This approach offers both trustless security and a fast, convenient user experience.

«There is a front mechanism in BitVM bridge design, the pegout user will get their BTC back at bitcoin block time,» He told CoinDesk. «The waiting time will be left to the broker(operator).»

Expansive ecosystem

Bitlayer is prioritizing integration with the Ethereum mainnet and major layer 2 solutions, as well as exploring Solana and Bitcoin-native layer 2s, such as Lightning Network applications. It has already secured integration with other leading ecosystems, including Sui, Base, Starknet, and Arbitrum, Sonic, Plume Network and Sundial.

«Our goal is to make YBTC universally accessible wherever significant DeFi liquidity exists, enabling bitcoin to flow securely and seamlessly into diverse ecosystems,» BitLayer’s team told CoinDesk.

The team added that it plans to establish a security committee, release audit reports and conduct bug bounties and open-source their code, creating a roadmap that positions BitLayer’s BitVM Bridge as a crucial piece of infrastructure for BTC’s future in DeFi.

Read more: Bitlayer Joins Forces With Antpool, F2Pool, and SpiderPool to Supercharge Bitcoin DeFi