Renowned short seller Jim Canos has ended his high-profile betting strategy with Bitcoin, saying the valuation differential that once made the trade so attractive has all but disappeared. Chanos said in a social media post about X on Saturday that he had exited a pair trade between short Strategic and long Bitcoin at the market open on Friday. The move comes after Strategy stock has plunged about 50% from its 2025 peak, wiping out many of the premium investors who were once willing to pay for the company’s large Bitcoin holdings. The software company has purchased billions of dollars worth of Bitcoin in recent years, making it the largest corporate holder of the flagship cryptocurrency. Strategy, formerly known as MicroStrategy until earlier this year, used leverage to build up its Bitcoin stockpiles and once traded at a significant premium to its Bitcoin holdings. MSTR YTD Regarding Mountain Strategy’s year-to-date stock, Chanos mentioned Strategy’s market implied net asset value (mNAV), which is a metric that compares a company’s market value to the value of the assets it owns. In Strategy’s case, it’s almost entirely Bitcoin. When Chanos first privately recommended the deal at the Bears in Hibernation conference in December 2024, Strategy’s mNAV was close to 2.5x. That means investors were paying about $2.50 for every $1 of Bitcoin held by Strategy. Since then, Strategy’s common stock has fallen and the excess value embedded in Strategy’s stock has shrunk, even as Bitcoin hovers near all-time highs. The mNAV multiple has since narrowed to approximately 1.2x, reflecting the decline in Strategy shares, Chanos explained. “We think there’s still room to take mNAV compression even further, but the theory is almost there,” he told Chanos & Co. customers. “It’s down from about 2.0x in July 2025, so it’s prudent to cover this trade at less than 1.25x mNAV.” The famous short seller, best known for shorting Enron a year before its 2001 bankruptcy, converted his hedge fund into a family office and advisory business in late 2023. “As MSTR continues to issue common stock, the premium should continue to narrow over time, but as MSTR is inevitably heading towards 1.0x mNAV, we recommend letting others chase that end of the trade,” Chanos & Co. wrote in a note attached to Chanos’ social media post.
