Notable short-seller Jim Chanos, previously a staunch opponent of Bitcoin and cryptocurrencies, has disclosed a fresh trading strategy that consists of shorting shares of Strategy (previously MicroStrategy) while acquiring Bitcoin.
At the Sohn Investment Conference in New York, Chanos informed CNBC that he’s “shorting MicroStrategy stock and securing Bitcoin.” The investor characterized the action as buying something for $1 and selling something for $2.50, indicating a notable price disparity.
Chanos contended that Strategy is promoting the concept of acquiring Bitcoin (BTC) within a corporate framework, and that various other companies are mimicking this approach in hopes of attaining a similar market premium.
Nevertheless, Chanos described this as “absurd.” He defined his trade as “a good gauge of not only the arbitrage itself, but also of retail speculation.”
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Shorting Strategy stock to acquire Bitcoin
Chanos’ recent action presumes that investors are overpaying for Bitcoin exposure via corporate vehicles like Strategy and other firms that adopt its Bitcoin accumulation strategy. The investor’s perspective indicates that obtaining Bitcoin directly is preferable to acquiring Strategy’s shares for indirect Bitcoin exposure.
Chanos’ stance implies that holding Bitcoin through corporations demonstrates excessive speculation and misjudgment of risk. It presumes that retail investors’ perception of possessing Bitcoin indirectly through corporate structures can inflate the company’s stock values.
While short-selling Strategy may appear promising, investors have already incurred billions betting against Saylor’s enterprise. In 2024, those who wagered against the company faced approximately $3.3 billion in losses as the firm’s stock began to ascend.
As of May 2025, Strategy owns roughly 568,840 Bitcoin, valued at nearly $59 billion. Since the enterprise initiated its Bitcoin acquisition in 2020, its stock price soared by 1,500%, outpacing the S&P 500’s performance during the same timeframe.
In a recently issued documentary by the Financial Times, Strategy analyst Jeff Walton remarked that the company’s Bitcoin assets would assist it in becoming the “leading publicly traded equity in the entire market” in the future.
Chanos previously labeled Bitcoin a “libertarian illusion”
Chanos hasn’t always held a favorable view of Bitcoin. In a 2018 interview, Chanos characterized Bitcoin as a “libertarian illusion.”
Chanos indicated that utilizing digital currency as a store of value in the worst-case situation wouldn’t be effective. He asserted that if fiat currency brings about a global collapse, the last thing he’d desire to possess is Bitcoin. “Food would be the most effective,” he stated.
He also condemned Bitcoin for facilitating illegal activities, describing the crypto sector as “the dark side of finance” during a 2023 interview, and accused the industry of enabling tax avoidance and money laundering.
Chanos has also voiced doubts regarding spot Bitcoin exchange-traded funds (ETFs), noting that Wall Street needs to maintain public interest in crypto to benefit from the fees.
Despite these criticisms, Chanos now seems to recognize value in holding Bitcoin directly, especially compared to investing in publicly traded companies with large BTC reserves.
Related: $1B Bitcoin exits Coinbase in a day as analysts warn of supply shock
Chanos’ background in short-selling
Chanos is widely recognized for his short position against the energy company Enron prior to the firm declaring bankruptcy in 2001. This strategy yielded profits for Kynikos Associates, a firm that he established.
A short position entails borrowing assets from a broker, selling them at the prevailing price, and then repurchasing the assets once the value declines to return what is owed to the broker. Short sellers gain when the asset’s value decreases, but incur losses when the asset appreciates.
Although the investor profited from short-selling Enron, Chanos’ predictions have not always been accurate. He has maintained a bearish stance on Tesla and announced a short position in 2016. However, Tesla’s stock soared by 2,200% from 2015 to 2021.
This incident resulted in substantial losses for Chanos’ fund. In 2020, the fund concluded with $405 million in assets under management after having over $900 million the preceding year. The fund was transformed into a family office, and external assets were returned to investors.
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