Jim Chanos Targets MicroStrategy Shares with Bitcoin Long-Short Trade
Veteran investor Jim Chanos, renowned for his successful bet against Enron, is now placing a strategic wager involving bitcoin and MicroStrategy (MSTR), the largest publicly traded holder of the cryptocurrency.
Speaking at the Sohn Investment Conference in New York during an interview with CNBC, Chanos outlined his approach: “We’re selling MicroStrategy stock and buying bitcoin,” describing it as an arbitrage opportunity. “Basically buying something for $1 and selling it for $2.50.”
MicroStrategy began accumulating bitcoin in 2020 and has since become a popular proxy for investors seeking exposure to BTC. The company has issued both debt and equity to fund its bitcoin purchases, currently holding approximately 568,840 bitcoins at an average acquisition cost of $69,287 per coin.
The firm’s aggressive bitcoin buying, widely endorsed by Wall Street analysts, has made its stock highly sensitive not only to bitcoin’s price movements but also to shifts in investor risk appetite. Over the past five years, MicroStrategy’s shares have surged roughly 3,500%, reaching $416 per share and giving the company a market capitalization of about $115 billion.
Chanos, however, questions the sustainability of MicroStrategy’s valuation, noting that its stock price has outpaced bitcoin’s price increase. He sees this as driven more by retail speculation than by fundamental value, a pattern he believes is now being replicated by other companies attempting to emulate MicroStrategy’s bitcoin acquisition strategy.
