Jim Chanos Ends Bitcoin Short Selling Strategy
Prominent short seller Jim Chanos has decided to abandon his notable strategy involving Bitcoin, citing that the valuation gap that once made this trade appealing has nearly vanished. In a post on social media platform X, Chanos announced that he had exited a pair trade involving shorting Strategic and going long on Bitcoin as of Friday’s market opening.
This decision follows a significant decline in Strategic’s stock, which has dropped approximately 50% from its peak seen in 2025, thereby erasing much of the premium that investors previously paid for the company’s substantial Bitcoin holdings. The software firm, which holds the title of the largest corporate Bitcoin holder, had invested billions in the cryptocurrency over recent years. Strategic, formerly called MicroStrategy, leveraged itself to increase its Bitcoin stockpile and once commanded a notable premium above its Bitcoin assets.
Referring to the market implied net asset value (mNAV) of Strategic, a metric that compares a company’s market value with its owned assets—almost entirely Bitcoin in this case—Chanos noted a dramatic shift. When he first advocated the trade at the Bears in Hibernation conference in December 2024, the mNAV ratio was around 2.5x, indicating investors were effectively paying $2.50 for every $1 of Bitcoin held by Strategic. However, as the company’s stock has plummeted, the embedded value has diminished, even while Bitcoin stays close to its all-time highs. Chanos pointed out that the mNAV ratio has narrowed to roughly 1.2x, reflecting the drop in Strategic’s share value.
“We think there’s still potential for further mNAV compression, but we’re almost there,” Chanos explained to his clients. He revealed that the ratio has decreased from about 2.0x in July 2025, deeming it wise to cover the trade while the mNAV is less than 1.25x. Renowned for shorting Enron just before its 2001 collapse, Chanos transformed his hedge fund into a family office and advisory firm in late 2023. In a note connected to his social media commentary, Chanos & Co. indicated that as Strategic continues issuing common stock, the premium should likely continue to decrease, suggesting that as the mNAV approaches 1.0x, it might be better for others to pursue that avenue.
