Jim Chanos, founder of the hedge fund Kynikos Associates, has sharply criticized the strategy of the company Strategy, formerly known as MicroStrategy. During the Sohn Investment Conference in New York, Chanos announced his new investment strategy, which involves simultaneously buying Bitcoin and opening short positions against the shares of Strategy, which is the largest public holder of Bitcoins.
This is reported by Business • Media
Chanos stated:
“We are selling MicroStrategy shares and buying Bitcoin — essentially buying something for $1 and selling it for $2.5.”
The company Strategy, led by Bitcoin enthusiast Michael Saylor, owns over half a million Bitcoins and has long been considered an index for cryptocurrency. However, Chanos criticizes the company’s model for using leverage and trading shares at a significant premium to the actual value of its Bitcoin assets.
The investor also emphasized that some companies trying to emulate the MicroStrategy model are raising significant funds by offering retail investors the idea of buying Bitcoin through a corporate structure. Chanos described these actions as
“absolutely absurd.”
Among these companies is the Japanese investment firm Metaplanet, which currently holds 6,796 BTC. According to Chanos, the market behavior of such companies indicates a speculative sentiment among retail investors, and his strategy represents a form of arbitrage between the real asset (Bitcoin) and an overvalued stock that merely mimics its ownership.
Chanos noted that this could serve as a good barometer not only for arbitrage but also for assessing retail speculation:
“This is a good barometer not only for the arbitrage itself but also for assessing retail speculation.”
It is important to note that despite Bitcoin’s 70% increase over the past year, the shares of Strategy have risen by over 220%, which, according to Chanos, indicates market overvaluation. Recall that recently, Michael Saylor stated that artificial intelligence has helped the company accumulate over $52 billion in Bitcoin.