Wall Street’s Notorious Bear, Jim Chanos, Bets on Bitcoin’s Rise While Shorting Strategy
Jim Chanos, founder and president of the investment advisory firm Chanos & Company, is betting on the rise of Bitcoin (BTC) while shorting the stock of Strategy (formerly MicroStrategy). In an interview with CNBC on Wednesday, he stated:
Strategy is seen as a proxy for Bitcoin in the stock market, as this American software company holds over 500,000 Bitcoins. However, the company has accumulated its Bitcoin reserves using leverage, resulting in its stock price trading at a significant premium compared to their Bitcoin holdings.
Chanos mentioned that he is executing what is known as a “Short Spread” strategy. Although he admitted that he cannot predict the ultimate price point for Bitcoin, he pointed out that when asset prices are far above their actual value, shorting is typically “profitable.” Chanos went on to say:
“Over the past year, Strategy’s stock price has surged more than 220%, while Bitcoin has risen nearly 70% during the same period. I believe this trade is not only good for arbitrage but also serves as a good barometer for observing retail speculation.”
Last week, Strategy once again spent approximately $1.34 billion to acquire 13,390 Bitcoins, bringing its total holdings to 568,840, with an average purchase price of about $69,287. As of the time of this publication, Bitcoin was trading at $101,850.
Chanos is known for founding the hedge fund Kynikos Associates, famous for shorting Enron. He currently operates a family office while advising institutional clients.
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