Legendary short-seller Jim Chanos has found a bold new trade in the world of crypto – going long on bitcoin while shorting MicroStrategy, the publicly traded company known for tying its fate to the digital asset.
Speaking at the Sohn Investment Conference in New York, Chanos told CNBC’s Scott Wapner, “We’re selling MicroStrategy stock and buying bitcoin and basically buying something for $1, selling it for two and a half dollars.” That’s not just a hot take – it’s a direct bet against the strategy of MicroStrategy’s outspoken co-founder, Michael Saylor.
MicroStrategy, once primarily a software and cloud company, has become a bitcoin whale over the past few years. It holds over 214,000 bitcoins on its balance sheet, making it a go-to proxy for bitcoin exposure in public markets. However, Chanos doesn’t buy into the hype. His issue? The company’s valuation is way out of sync with its actual bitcoin holdings, and he’s not alone in noticing.
“If you look at where MicroStrategy and now, more ominously, some of its copycat companies that are now raising lots of money are doing is they are basically selling retail investors the idea that we are going to buy bitcoin in a corporate structure. Because of what MicroStrategy has done, you should value us at a similar premium,” Chanos said. He called that thinking “ridiculous.”
The core of his argument: instead of paying a massive premium for a company that just holds bitcoin, why not just buy the asset directly? And that’s exactly what he’s doing.
It’s a classic Chanos move – take advantage of retail hype and structural mispricing. MicroStrategy shares are up more than 220% in the past year, outperforming bitcoin itself, which has gained nearly 70% in the same period. That kind of gap, he believes, is a speculative bubble in the making.
“This is a good barometer of not only just of the arbitrage itself, but I think of retail speculation,” he added.
Chanos made his name shorting Enron in the early 2000s, and has since built a reputation as one of Wall Street’s sharpest contrarian voices. He founded Kynikos Associates and now manages his own family office, offering guidance to institutional investors.
Interestingly, his comments come at a time when Bitcoin has been gaining political support. Former President Donald Trump has recently voiced strong support for crypto, and prices have jumped since his broad-based tariff announcement in early April. That macro backdrop only adds more fuel to bitcoin’s rise – and possibly, more heat to Chanos’ arbitrage trade.
Also Read: Peter Schiff Mocks Saylor Over Bitcoin’s Unexpected Use Case
