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Title:Jim Chanos Shorts MicroStrategy, Buys Bitcoin: Arbitrage Strategy Explained

Jim Chanos Bets Against MicroStrategy, Favors Direct Bitcoin Investment

Legendary short-seller Jim Chanos has made headlines with a bold move in the crypto and equity markets: he's shorting shares of MicroStrategy (MSTR) while going long on Bitcoin. In a recent interview with CNBC, Chanos revealed that he’s using an arbitrage strategy to capitalize on what he believes is an overvaluation of MicroStrategy relative to Bitcoin.

Chanos, well-known for his contrarian bets, pointed to MicroStrategy’s sky-high $115 billion valuation and its staggering 3,500% share price increase over the past five years. He described this rally as “extreme bullishness,” especially considering Bitcoin’s more modest gains in the same period.

“It’s ridiculous,” Chanos said, referring to the trend of companies like MicroStrategy promoting Bitcoin exposure through institutional structures. He argues that investors should avoid indirect, leveraged exposure to Bitcoin via public companies and instead consider holding Bitcoin directly.

“We’re selling MicroStrategy stock and buying Bitcoin,” he explained. “We’re doing exactly what MicroStrategy and Michael Saylor once did—but in reverse. Essentially, we’re buying something for $1 and selling it for $2.50.”

To further support his case, Chanos highlighted recent performance data: MicroStrategy shares have surged over 220% in the past year, while Bitcoin has risen approximately 70%. According to Chanos, this disconnect suggests that MSTR is significantly overvalued in comparison to the underlying asset it’s tied to—Bitcoin.

While Chanos’ strategy may be controversial, it underscores a broader conversation about how investors choose to gain crypto exposure—and whether traditional financial structures are the best vehicle for doing so.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.
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