Strategy (MSTR) has become the go-to tool for crypto investors trying to manage risk, according to Tom Lee, chairman and CEO of Bitmine, partly explaining its 43% drop over the past month.

“[Strategy] is probably the most important stock watch right now, because that is the bitcoin proxy, it’s the most liquid name,” Lee said in an interview with CNBC on Thursday.

With limited options to hedge losses directly in crypto markets, institutional traders have turned to shorting Strategy shares instead. The company holds nearly 650,000 bitcoin BTC$84,517.51, making its stock price closely tied to bitcoin’s performance.

“It seems to me that in the crypto world when they’re trying to hedge their loss in bitcoin and ethereum they can’t find any other way to hedge it except shorting the liquid stocks that it proxies and that’s the MicroStrategys,” Lee said.

He added that crypto-native hedging tools, like derivatives on bitcoin and ether ETH$2,748.38, aren’t liquid or deep enough for major players. “Anyone who has a sizable bitcoin long position … they have very limited ability to hedge it in crypto derivatives,” he said.

But Strategy, he explained, offers a workaround. “Somebody can use [Strategy’s] option chain which is so liquid to hedge all of their crypto.”

In effect, he said, “[Strategy] is essentially absorbing all the hedging pressure that the crypto industry is trying to do to protect their longs.”

Lee also pointed to the lingering effects of the Oct. 10 market crash, which wiped out $20 billion in value and disrupted liquidity across exchanges. “It really crippled market makers,” he said, describing them as the “central bank” of crypto.

Since then, cracks in the system have remained, with liquidity still thin across altcoins, miner stocks and bitcoin proxies like Strategy. MSTR has been among the hardest hit in the current downturn, which Lee believes is partly due to it serving as a pressure valve for the rest of the market.

He believes crypto’s market plumbing remains fragile, and Strategy’s role as a hedge is a sign of deeper structural issues.