MicroStrategy supporters analyze: Why the well-known short positions of Jim Chanos on MSTR will provide upward fuel for BTC.

Jim Chanos is a legendary short seller on Wall Street, known for accurately targeting financially troubled companies. His rise to fame came from shorting Enron (. In 2001, he discovered its accounting fraud a year before Enron's bankruptcy, heavily shorted the stock, and made significant profits, gaining widespread recognition. He is the founder of the short positions fund Kynikos Associates, though the fund was closed in 2023 and shifted to a family office.

Other classic shorting cases include Luckin Coffee, China Evergrande Group, and Tesla, among others. He has long questioned TSLA's overvaluation, but in recent years, Tesla's strong stock price has led him to pay a painful price. His investment philosophy focuses on finding value traps, excelling at analyzing financial statement loopholes to identify problematic companies. The most recent instance was choosing to publicly short Strategy ) original MicroStrategy (, criticizing its absurd premium as a "Bitcoin proxy stock," while simultaneously buying Bitcoin as a hedge.

Famous short positions: Holding BTC and shorting MSTR for hedging operation

Jim Chanos revealed that he is simultaneously executing a hedging operation: shorting Strategy stocks while directly buying Bitcoin. He explained, "We are merely replicating the operations of MicroStrategy and its co-founder Michael Saylor," he added, "Selling MicroStrategy stocks to hold Bitcoin is equivalent to obtaining a value of $2.5 at a cost of $1."

The strategy of continuously leveraging to increase Bitcoin holdings has resulted in a significant premium in its stock price relative to the value of its Bitcoin holdings. Chanos criticizes that this model is causing an absurd imitation effect, with more and more companies selling retail investors the story of "we will hold Bitcoin in corporate form," demanding the market to give the same premium.

)Famous shorting investor Jim Chanos: Long Bitcoin + shorting MicroStrategy for arbitrage(

"MicroStrategy and its imitators are essentially packaging corporate financial operations as Bitcoin investment tools," Chanos told CNBC. "We are simply replicating their strategy, selling overpriced MSTR stock, and investing in real Bitcoin."

In the past year, the stock price of Strategy surged over 220%, while Bitcoin's increase was about 70% during the same period. Chanos emphasized that this price difference reflects the speculation enthusiasm of retail investors: "This is not only an arbitrage opportunity but also a thermometer for observing the frenzy in the retail market."

Strategy believers: shorting MSTR, long BTC. The strategy is BTC fuel.

Fenix, the CEO of Teahouse Finance, stated that a number of funds are using the strategy of "shorting MSTR and going long on BTC," and they have watched MSTR rise from 150 to the current 400, leaving the shorts in despair. Currently, MSTR's "days to cover" has remained stable at around 1.5 days, which is a very healthy indicator. Therefore, we should embrace this strategy with open arms, as the essence of MSTR is based on the long-term growth value of BTC.

He pointed out that Michael Saylor has established a moat for BTC with an average buying price of about $70,000 per coin. Unless BTC drops below $70,000 in the future, it is impossible to truly break through MSTR's stock price defense line. The strategy of "shorting MSTR and going long on BTC" would instead further drive up the price of BTC, ultimately leading to a complete liquidation by the new incoming buyers.

He stated that the reason traditional finance has such arbitrage ideas is that traditional funds cannot accept MSTR's financial model of borrowing to buy BTC, believing that such operations are a Ponzi scheme. However, Michael Saylor's brilliance lies in his insight that the purchasing power of the dollar will continue to decline in the future. In addition to continuously buying BTC, a scarce asset, through borrowing ) and incurring debt in a currency ( that will continue to depreciate, purchasing more scarce assets is indeed a complementary strategy that is two sides of the same coin.

This article analyzes MicroStrategy supporters: why the well-known short positions of Jim Chanos in MSTR will provide upward fuel for BTC. It first appeared in Chain News ABMedia.