Jim Chanos Bets on Bitcoin, Shorts MicroStrategy in Valuation Play
Legendary short-seller Jim Chanos is once again challenging market consensus — this time targeting MicroStrategy (MSTR), the public company with the largest bitcoin (BTC) holdings, while backing bitcoin itself in a long-short trade.
Speaking at the Sohn Investment Conference in New York, Chanos told CNBC that his fund is “short MicroStrategy and long bitcoin,” calling it a classic arbitrage opportunity. “It’s like buying $1 worth of bitcoin and selling it for $2.50 through MicroStrategy stock,” he said.
MicroStrategy began acquiring bitcoin in 2020 and has since transformed into a de facto bitcoin investment vehicle. The firm has used a combination of debt and equity raises to amass 568,840 BTC, acquired at an average price of $69,287 per coin.
While the strategy has drawn praise from bullish Wall Street analysts, it has also made MicroStrategy’s stock highly sensitive to swings in both bitcoin’s price and broader market sentiment. Shares have soared over 3,500% in the last five years, recently trading around $416, giving the company a market cap of $115 billion.
Chanos, however, questions the rationale behind that valuation. He argues that MSTR’s price has decoupled from bitcoin’s actual value and is now largely driven by speculative retail enthusiasm rather than financial fundamentals.
He also warned that other companies attempting to mimic MicroStrategy’s bitcoin-heavy model may face similar valuation distortions.
