Original Title: How Jim Chanos outplayed Michael Saylor: short MSTR, long BTC
Original Author: Proto Staff
Translated by: Peggy, BlockBeats

Editor's Note: When Strategy turned "holding Bitcoin through a company" into a belief, Jim Chanos chose to bet in the opposite direction: shorting MSTR and going long on BTC.

Seemingly divergent, yet essentially the same: both sides are exploiting structural biases in the market, one leveraging belief and the other rationally dismantling the bubble. In this contest of valuation and liquidity, faith and skepticism are not clearly defined but rather reflect two choices that mirror each other.

The following is the original text:

Wall Street's famous "cynical" investor Jim Chanos has closed out his widely watched and controversial short position against Michael Saylor's Strategy—reportedly, he achieved about 100% returns by shorting the company's common stock MSTR.

More accurately, this well-known short seller established a pair trade: shorting MSTR while going long on Bitcoin (BTC).

He is not betting that MSTR's stock price will absolutely decline in dollar terms, but rather that the premium of MSTR relative to BTC will shrink.

Strategy is one of the largest Digital Asset Treasury (DAT) companies globally, which acquire crypto assets through financial leverage rather than relying on traditional product or service sales to generate revenue. The company currently holds about $66 billion in Bitcoin (BTC), with an enterprise value of approximately $84 million (market capitalization plus net debt including preferred stock), equivalent to a 1.27 times premium over its net asset value (mNAV).

However, since Chanos established his position, this mNAV has seen a significant decline.

He established this pair trade in November 2024 to express skepticism about MSTR's performance relative to Bitcoin; as of last Friday morning, Chanos and his company Chanos & Co. had fully closed their position, with a paper profit of about 100%.

Chanos's "victory tour" shared on social media sparked heated discussions, with related posts garnering over 1 million views.

Shorting MSTR, Going Long on BTC

Chanos's profits primarily stem from the decline in MSTR's net asset multiple (mNAV).

In November 2024, this multiple was once above 3 times; by December of the same year, when he articulated his investment logic at the annual meeting, the average level had dropped to about 2.5 times. When he fully closed his position, MSTR's mNAV had fallen to 1.23 times—indicating that the company's stock price was only 23% above the value of its Bitcoin assets.

Meanwhile, the other part of his trade was also rising. Since November 2024, Bitcoin's price has increased by about 25%. In other words, Chanos not only doubled his funds by shorting MSTR but also earned about 25% from the rise in Bitcoin.

Profiting on both sides has solidified this family office fund manager's position as "Saylor's most successful critic."

Imitating Strategy, Surpassing Strategy

Chanos faced fierce criticism from Saylor supporters, including members of the community who call themselves "Irresponsibly Long MSTR," after publicly expressing his bearish views on Strategy at the 2025 New York Sohn Investment Conference.

In multiple television interviews and social media appearances, Chanos emphasized that his bearish rationale is based on Strategy's difficulty in maintaining a high net asset multiple (mNAV) over the long term.

He described his trading strategy as: "Sell MicroStrategy's stock, buy Bitcoin—basically buying something for $1 and selling it for $2.5." He also bluntly criticized Saylor's leveraged approach to buying Bitcoin as "absurd" and "pure financial nonsense."

In fact, Chanos believes that his trading logic essentially mimics Saylor himself: selling MSTR and using the proceeds to buy Bitcoin.

Chanos has repeatedly pointed out that Strategy's continuous dilution of its equity and ongoing sale of MSTR to purchase more BTC were key incentives for him to establish this pair trade (shorting MSTR, going long on BTC).

Although Strategy has also financed itself by issuing billions of dollars in preferred stock (which will not directly dilute MSTR's equity temporarily), most of its funding still comes from selling MSTR stock.

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