Legendary short positions turn to arbitrage game with Bitcoin and MSTR

Chanos told CNBC that his operating logic is actually to reverse the approach of MicroStrategy co-founder Michael Saylor: “We are just executing their trades in reverse.” He added, “Selling MSTR and converting it into real Bitcoin is essentially getting $2.5 worth for $1.”

The strategy has long been to acquire Bitcoin through leveraged methods, resulting in a significant premium between its stock price and actual holding value. This overvaluation is seen by Chanos as a microcosm of irrational market behavior and provides a reasonable basis for his shorting strategy. He warns that more and more companies are emulating the narrative of corporate coin holding, selling equity to retail investors under the guise of the Bitcoin concept, which could push asset prices to unsustainable highs.

shorting MSTR + go long BTC strategy

Fenix, the CEO of Teahouse Finance, also pointed out that shorting MicroStrategy and going long on Bitcoin has become a common choice among many fund managers. Although the MSTR, which soared from $150 to $400, caused significant losses for the short positions, he emphasized that such strategies ultimately became the driving force behind the rise in BTC prices.

Fenix emphasizes that Saylor has turned MicroStrategy into a Bitcoin asset fortress based on a cost of about $70,000 per coin; as long as the Bitcoin price does not fall below that average cost, this defensive line will be difficult to shake. Moreover, when institutions and investors short MSTR while rushing into BTC, it will further ignite Bitcoin’s upward potential. Ultimately, the shorts may face a severe backlash. He further criticizes the traditional financial perspective for misunderstanding this model as a Ponzi structure, while ignoring Saylor’s forward-looking strategy of leveraging the devaluation of currency in an inflationary environment to acquire scarce assets.

Institutions choose to hold coins indirectly through MSTR

A recent research report from Standard Chartered Bank pointed out that although many institutions have not directly purchased Bitcoin ETFs, they have significantly increased their holdings of MSTR stock, thereby indirectly gaining exposure to Bitcoin. Geoffrey Kendrick, the bank’s global head of digital asset research, noted in the report that this trend reflects a shift in institutional asset allocation from underweight to overweight, and even predicted that Bitcoin might break the $500,000 price level before U.S. President Trump leaves office in 2029.

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Summary

Chanos’s hedging actions undoubtedly reveal the phenomenon of both enthusiasm and skepticism in the current market towards the corporatization of Bitcoin. His operations are both a risk-hedging strategy and a form of reverse bet against the current Bitcoin narrative. Meanwhile, as institutions continue to enter through MSTR, it seems that the pricing power of Bitcoin is shifting from crypto fundamentalists to sovereign and retirement capital. For all observers focused on this hedging battle, the real question may be: is this strategy a short-term arbitrage? Or the beginning of the next wave of asset allocation transformation?