Jim Chanos takes opposing bets on Bitcoin and Strategy

3 weeks ago

Prominent short-seller Jim Chanos, erstwhile a vocal professional of Bitcoin and cryptocurrencies, has revealed a caller trading play that involves shorting shares of Strategy (formerly MicroStrategy) and buying Bitcoin.

At the Sohn Investment Conference successful New York, Chanos told CNBC he’s “selling MicroStrategy banal and buying Bitcoin.” The capitalist described the determination arsenic buying thing for $1 and selling thing for $2.50, referring to what helium sees arsenic a important terms mismatch.

Chanos argued that Strategy is selling the thought of buying Bitcoin (BTC) successful a firm structure, and that different companies are pursuing suit successful hopes of receiving a akin marketplace premium.

However, Chanos said this was “ridiculous.” Chanos described his commercialized arsenic “a bully barometer of not lone conscionable of the arbitrage itself, but I deliberation of retail speculation.”

Selling Strategy banal to bargain Bitcoin

Chanos’ caller determination assumes investors overpay for Bitcoin vulnerability done firm wrappers similar Strategy and different firms that travel its Bitcoin accumulation blueprint. The investor’s determination reflects a stance that purchasing Bitcoin straight would beryllium amended than purchasing Strategy’s stocks for indirect Bitcoin exposure.

Chanos’ determination suggests holding Bitcoin done companies reflects excessive speculation and mispricing of risk. It assumes that retail investors’ thought of having Bitcoin indirectly done firm wrappers tin inflate the company’s banal valuations.

While shorting Strategy seems similar a bully idea, investors person already lost billions shorting Saylor’s company. In 2024, investors who stake against the steadfast mislaid astir $3.3 cardinal arsenic the company’s banal started to rise.

As of May 2025, Strategy holds astir 568,840 Bitcoin, valued astatine astir $59 billion. Since the institution started accumulating Bitcoin successful 2020, its banal terms surged by 1,500%, outperforming the S&P 500’s gains during the aforesaid period.

In a precocious released documentary from the Financial Times, Strategy expert Jeff Walton said that the company’s Bitcoin holdings would assistance it go the “number 1 publically traded equity successful the full market” successful the future.

Chanos antecedently called Bitcoin a “libertarian fantasy”

Chanos has not ever been favorable toward Bitcoin. In a 2018 interview, Chanos described Bitcoin arsenic a “libertarian fantasy.”

Chanos said that having integer currency arsenic a store of worth successful the worst-case script wouldn’t work. The capitalist said that if fiat currency brings the satellite down, the past happening he’d privation to ain is Bitcoin. “Food would enactment the best,” helium said.

He besides criticized Bitcoin for enabling illicit activity, calling the crypto assemblage “the acheronian broadside of finance” successful a 2023 interview, and accused the manufacture of facilitating taxation evasion and wealth laundering.

Chanos besides expressed skepticism astir spot Bitcoin exchange-traded funds (ETFs), saying that Wall Street needs to support the nationalist funny successful crypto to nett from the fees.

Despite those critiques, Chanos present appears to spot worth successful holding Bitcoin directly, peculiarly successful opposition to investing successful nationalist companies with ample BTC treasuries.

Chanos’ past successful short-selling

Chanos is champion known for his abbreviated presumption against the vigor institution Enron earlier the steadfast filed for bankruptcy successful 2001. The determination generated profits for Kynikos Associates, a steadfast that helium founded.

A short position involves borrowing assets from a broker, selling them astatine the existent price, and past repurchasing the assets erstwhile the worth falls to springiness backmost what is owed to the broker. Short sellers nett erstwhile the asset’s worth declines, but look losses erstwhile the plus appreciates.

While the capitalist reaped nett from short-selling Enron, Chanos’ predictions aren’t ever correct. Chanos has been bearish connected Tesla and announced a abbreviated presumption successful 2016. However, Tesla banal skyrocketed by 2,200% betwixt 2015 and 2021.

The lawsuit caused large losses to Chanos’ fund. In 2020, the money ended with $405 cardinal successful assets nether absorption aft having implicit $900 cardinal the erstwhile year. The money was converted into a household office, and outer assets were returned to investors.