Jim Chanos, a prominent short-seller renowned for his critical stance on Bitcoin and the cryptocurrency market, has made a surprising shift in his trading strategy, which contradicts his previous viewpoints.
During his appearance at the Sohn Investment Conference in New York, Chanos disclosed to Finance Newso that he is taking a short position on shares of Strategy, the company formerly known as MicroStrategy, while simultaneously investing in Bitcoin directly.
Chanos described his new trade as “selling something for $2.50 and buying something for $1,” indicating that he perceives a considerable discrepancy in valuation between Bitcoin and the stocks of companies that hold it.
Chanos: Strategy Stock Overvalued for Just Holding Bitcoin
He contended that firms like Strategy are enjoying inflated market valuations solely because of their Bitcoin holdings, creating a mispricing of significant proportions.
“It’s ridiculous,” Chanos remarked, framing his trade as both a strategy for arbitrage and a critique of what he sees as rampant retail speculation.
Strategy, under the leadership of executive chairman Michael Saylor, stands as the largest corporate holder of Bitcoin globally, boasting approximately 568,840 BTC valued at about $59 billion as of May 2025.
Since embarking on its Bitcoin accumulation strategy in 2020, the company’s stock has experienced an increase of over 1,500%, significantly outpacing the overall market performance.
Chanos asserts that gaining exposure to Bitcoin through stocks like Strategy is both an inefficient and an overvalued investment approach for market participants.
WATCH: Billionaire Jim Chanos says he’s long on #Bitcoin $BTC but short on #MicroStrategy $MSTR, calling it “too leveraged.” pic.twitter.com/NNRSZU2V2N
— Roundtable Network (@RTB_io) May 15, 2025
He pointed out that retail investors are effectively paying a premium for indirect exposure to Bitcoin via public companies, resulting in inflated valuations that lack a sound basis.
Chanos’s position contrasts sharply with that of some analysts at Strategy, including Jeff Walton, who recently claimed in a Financial Times documentary that the company could potentially emerge as “the number one publicly traded equity in the entire market” due to its Bitcoin holdings.
Historically, Chanos has been a vocal critic of Bitcoin and the broader cryptocurrency space. In 2018, he characterized Bitcoin as a “libertarian fantasy,” contending that digital assets would hold little value during a financial crisis.
“If the world goes down, I’d rather have food than Bitcoin,” he famously quipped. Additionally, he expressed concerns about the sector’s tendency to facilitate illicit financial activities, referring to crypto as “the dark side of finance” in a 2023 discussion.
Chanos Prefers Direct Bitcoin Ownership
Despite his earlier criticisms, Chanos now believes that owning Bitcoin directly offers better value than investing in stocks heavily weighted with cryptocurrency assets.
He has also voiced reservations regarding the proliferation of spot Bitcoin ETFs, suggesting that Wall Street’s motivation revolves more around fee generation than a true belief in Bitcoin’s potential.
Chanos gained notoriety for his successful short position against Enron prior to its collapse in 2001, yielding substantial profits for his firm, Kynikos Associates.
However, not all of his high-profile bets have proven to be successful. His short on Tesla, for instance, resulted in significant losses as the stock skyrocketed over 2,000%, ultimately leading to the transformation of his fund into a family office.
According to reports, Jeff Walton, an analyst at Strategy, has suggested that the company may ascend to become the top publicly traded firm globally.
Walton believes that the firm’s extraordinary Bitcoin exposure, which recently surpassed $104,000, provides it with a competitive advantage unmatched by other companies.
“Strategy holds more of the best asset and most pristine collateral on the planet than any other company, by multiples,” he declared.
The post Bitcoin Skeptic Jim Chanos Shorts Saylor’s Strategy but Buys BTC appeared first on Finance Newso.
