Jim Chanos is adopting a long Bitcoin / short MicroStrategy strategy, which he considers overvalued compared to the real value of its BTC holdings.
He criticizes the growing gap between the MSTR stock price (+3,500% in five years) and the value of the 568,840 BTC in reserve.
According to Chanos, MSTR has become a speculative proxy for Bitcoin, reflecting excessive and risky retail euphoria.
Jim Chanos long Bitcoin and short MicroStrategy
The renowned short-seller Jim Chanos reemerges with a contrarian strategy: long on Bitcoin, short on Strategy (formerly MicroStrategy). He believes that the MSTR stock is overvalued and no longer reflects the real value of the bitcoins held by the company.
A clear arbitrage: sell MSTR, buy BTC
Present at the Sohn Investment Conference in New York, Chanos outlined his position to CNBC. “We sell MicroStrategy, we buy Bitcoin,” he summed up. “It’s an arbitrage: buying something at $1, selling it at $2.50.” A direct critique of the current valuation of Michael Saylor’s company.
Strategy currently holds 568,840 BTC, acquired in part through equity and debt fundraisings. But for Chanos, the premium given to MSTR on the stock market is beyond comprehension. The stock has soared by +3,500% in five years, with a current price around $416 and a market cap of $115 billion, a multiple far beyond the mere value of stored BTC.
MicroStrategy, a gauge of retail speculation?
The core of the argument: MSTR has become too speculative as a Bitcoin proxy. Its stock performance has far exceeded that of Bitcoin itself. Chanos sees it as a reflection of market euphoria:
The valuation of MicroStrategy is a good barometer of retail speculation.
An implicit warning against funds and companies tempted to replicate the Saylor model.
The bubble of Bitcoin proxies?
Strategy is no longer alone in playing this role. Several firms are adopting a similar strategy of aggressive BTC accumulation, fueled by financial markets. For Chanos, this dynamic opens the door to major discrepancies between the real value of the assets held and the valuation of the companies involved.
With this long/short position, Jim Chanos sends a clear message: in his view, Bitcoin retains structural value. But financial products that claim to be associated with it can be the stage for irrational excesses, and therefore profitable bets for those who can identify them.
