With Bitcoin prices returning to the $100,000 high and MSTR stock prices continuing to rise, the market’s divergence on the valuation of Strategy (formerly MicroStrategy) is rapidly widening. On one hand, several global large institutions are quietly increasing their holdings of MSTR stocks, considering it as an important financial tool for indirect Bitcoin exposure; on the other hand, its highly volatile and deeply leveraged asset structure is also attracting the sniper attacks of Wall Street short positions. As Strategy continues to increase its Bitcoin exposure, it is evolving into a barometer of Bitcoin price trends and the focal point of capital leverage games.

Stock prices outperforming tech giants, caught the eye of big short positions on Wall Street

At the recent New York Sohn Investment Conference, Wall Street legend short positions, former hedge fund manager Jim Chanos said he is shorting Strategy and buying Bitcoin at the same time, calling it a ‘buy at 1 dollar, sell at 2.5 dollars’ arbitrage opportunity.

He pointed out that Strategy holds over 500,000 Bitcoins with high leverage, and the current stock price has a high premium compared to the actual position. He criticized a group of companies in the market that imitate Strategy, selling the concept of buying Bitcoins through company structures to retail investors and seeking high valuations based on this, calling this logic ‘absurd’.

Over the past year, MicroStrategy’s stock price has risen by over 220%, while Bitcoin has only risen by about 70%. Chanos believes this trade is a barometer of observing retail speculative behavior.

Chanos is a highly influential investor on Wall Street, as the founder of the Kynikos Associates hedge fund, which focuses on short strategies. He is renowned for his deep fundamental analysis and keen ability to identify financial fraud and business model flaws in companies. Classic shorting cases include Enron, WorldCom, and Luckin Coffee. However, in recent years, he has also suffered significant losses from shorting Tesla, leading to the closure or adjustment of some funds.

It is worth noting that this is not the first time Strategy has become a target of well-known short positions. Last December, the well-known short-selling institution Citron Research announced its short position on Strategy. Although it was bullish on Bitcoin at the time, it believed that MSTR had deviated significantly from the fundamental of Bitcoin. This news briefly caused a sharp decline in MSTR, but due to the optimistic market sentiment driven by the rise in Bitcoin, as well as the increased market visibility and liquidity brought by MSTR’s inclusion in the Nasdaq 100 index, this short position ultimately failed.

Recently, in addition to external short selling pressure, Strategy executives have also frequently reduced their holdings. According to disclosures, Jarrod M. Patten, who has served as a director of the company for over 20 years, has sold approximately $5.2 million in stocks since April this year and plans to continue selling $300,000 this week.

However, MSTR’s recent stock price performance remains strong. According to MSTR-tracker data, the current total market value of Strategy has reached $109.82 billion, ranking 183rd in the global asset market value. So far this year, MSTR has risen by about 37.1%, outperforming not only Bitcoin but also leading ahead of tech giants like Microsoft, Nvidia, Apple, and Amazon.

Q1 financial report incurred a huge loss of over 4 billion US dollars, attracting bets from over a thousand institutional investors

MSTR-tracker data shows that as of May 16, Strategy holds a total of 568,840 BTC, with a year-to-date Bitcoin investment return of 15.65%. Based on the latest data, the estimated earnings per share (EPS) for Bitcoin this quarter is $37.82.

However, in contrast to the significant returns of Bitcoin, the financial performance of Strategy in the latest quarter is under pressure due to the impact of the Bitcoin price retreat in the latter part of the first quarter of this year. The company’s financial report for the first quarter of 2025, recently released, shows a year-on-year revenue decline of 3.6% to $1.111 billion, which is below market expectations. The net loss is as high as $4.23 billion ($16.49 per share), significantly exceeding market expectations.

To alleviate financial pressure and further expand its Bitcoin exposure, Strategy is accelerating its capital operation strategy. Earlier this month, Strategy announced a new $21 billion public market common stock issuance plan and has raised its BTC yield target from 15% to 25%, and its BTC-dollar yield target from $10 billion to $15 billion. Subsequently, Strategy further announced the launch of a new “42/42 plan” aimed at raising $84 billion for the purchase of Bitcoin within two years. In response, Wall Street analysts expressed support, with Benchmark and TD Cowen analysts reiterating their buy ratings on the company, believing that its capital raising strategy is feasible.

Unlike most company stocks corresponding to the market sales performance of company products, the positioning of Strategy stock is the “smart leverage” of Bitcoin. Its founder Saylor specifically elaborated on this narrative when the company was renamed Strategy. The traditional assets (such as SPDR S&P 500 ETF and Invesco QQQ Trust, with volatility levels between 15-20) and Bitcoin (with volatility levels between 50-60) form a gap of about 45%. The ordinary shares of Strategy target even higher volatility than Bitcoin itself, aiming for a volatility level of 80-90, while maintaining the “smart leverage” as described by Saylor through a combination of equity issuance and convertible bonds.

Although there are short position snipers, there are also many large institutional investors betting on the Strategy. Recently, the bets of institutional investors on Strategy have also strengthened market confidence. According to Fintel data, so far, a total of 1,487 institutions hold Strategy stocks, with a total of 139 million shares, currently valued at approximately $55.175 billion.

Citadel Advisors

Citadel Advisors is one of the world’s largest hedge funds. According to the 13F filing, as of the first quarter of this year, Citadel Advisors held a total value of over $6.69 billion in MSTR stocks, approximately 23.22 million shares, making it one of the largest shareholders of Strategy.

Vanguard Group

As of Q1 2025, Vanguard Group, one of the world’s largest public fund management companies, holds approximately 20.58 million shares of MSTR, worth over $5.93 billion.

Susquehanna International Group

Susquehanna International Group is a globally renowned hedge fund company. As of the first quarter of 2025, the value of MSTR stocks held by the company exceeds $5.73 billion, approximately 19.88 million shares.

Jane Street

13F documents show that as of Q1 2025, Jane Street, one of the world’s top hedge funds, holds over 16 million shares of MSTR, worth nearly $4.63 billion.

Capital International

According to the 13F filing submitted by Capital International in Q1 this year, the institution holds nearly 14.68 million shares of MSTR, worth about $4.23 billion.

BlackRock

As of the first quarter of this year, BlackRock, one of the world’s largest asset management giants, holds approximately 14.42 million shares of MSTR, worth over $4.15 billion.

CalPERS

CalPERS is the second-largest public pension fund in the United States, managing over $300 billion in assets. As of Q1 2025, CalPERS held 357,000 shares of MSTR, worth approximately $102 million.

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