Strategy's Bitcoin Leveraged Game Gambling: Wall Street Bears Sniping, Big Institutional Stock Betting

Words: Nancy, PANews

As the price of Bitcoin returns to the $100,000 high and MSTR shares continue to move higher, the divergence over Strategy's (formerly MicroStrategy) valuation is accelerating. On the one hand, a number of large global institutions are quietly increasing their holdings of MSTR as an important financial instrument for indirect allocation to Bitcoin. On the other hand, its highly volatile and deeply leveraged asset structure has also attracted sniping from Wall Street bears. As Strategy continues to increase its exposure to Bitcoin, it is evolving into a bellwether for Bitcoin's price action and the focus of the capital leverage game.

Shares outperform tech giants and are targeted by Wall Street shortsAt

recent Sohn investment conference in New York, legendary Wall Street bears and former hedge fund manager Jim Chanos said that he was shorting Strategy and buying Bitcoin at the same time, calling it an arbitrage opportunity of "buying for $1 and selling for $2.5".

He pointed out that Strategy holds more than 500,000 bitcoins with high leverage, and the current stock price is at a high premium to the actual position. He criticized the emergence of a group of companies imitating Strategy in the market, selling retail investors the concept of buying bitcoin through corporate structures to fight for high valuations, calling this logic "absurd".

Over the past year, MicroStrategy shares have risen more than 220%, while Bitcoin has only risen about 70%. Chanos sees the deal as a "barometer" of retail speculation.

Chanos is an influential and well-known Wall Street investor, and as the founder of Kynikos Associates, a hedge fund focused on shorting strategies, he is known for his in-depth fundamental analysis and ability to identify corporate financial fraud and business model flaws, including Enron, WorldCom, and Luckin Coffee. However, in recent years, he has also suffered serious losses due to shorting Tesla, and some funds have closed or adjusted their strategies.

It's worth noting that this isn't the first time Strategy has been targeted by well-known bears. In December last year, Citron Research, a well-known short-selling institution, announced a short-selling strategy, which believed that MSTR had deviated significantly from Bitcoin fundamentals, despite its bullish attitude towards Bitcoin as a whole at the time. The news caused MSTR to plummet in the short term, but the short sale was ultimately unsuccessful due to the positive market sentiment driven by Bitcoin's rally and the increased market visibility and liquidity brought about by MSTR's inclusion in the Nasdaq-100 index.

Recently, in addition to external short-selling pressure, Strategy executives have also frequently reduced their shareholdings recently. According to the disclosure, Jarrod M. Patten, who has been a director of the company for more than 20 years, has sold about $5.2 million in shares since April this year, and plans to continue to reduce his holdings by $300,000 this week.

Despite this, MSTR's stock price has been strong recently. According to MSTR-tracker data, the total market capitalization of Strategy has reached $109.82 billion, ranking 183rd in the global asset market capitalization. MSTR has risen by about 37.1% this year, outperforming not only Bitcoin, but also ahead of tech giants such as Microsoft, Nvidia, Apple and Amazon.

Q1 reported a huge loss of more than $4 billion, and more than 1,000 institutions held shares to bet on

MSTR-tracker Data shows that as of May 16, Strategy held a total of 568,840 BTC, and the year-to-date return on Bitcoin investment was 15.65%. Based on the latest estimates, Bitcoin earnings per share (EPS) for the quarter are expected to be $37.82.

But in contrast to the impressive Bitcoin returns, Strategy's financial performance in the latest quarter was weighed by the retracement of Bitcoin prices late in the first quarter of this year. The company's recently released financial results for the first quarter of 2025 showed that revenue fell 3.6% year-over-year to $111.1 million, missing market expectations, and the net loss was as high as $4.23 billion ($16.49 per share), significantly exceeding market expectations.

To alleviate financial pressures and further expand its exposure to Bitcoin assets, Strategy is accelerating its capital operation strategy. Earlier this month, Strategy announced a new $21 billion public market common stock offering and has raised its BTC yield target from 15% to 25% and BTC USD earnings target from $10 billion to $15 billion. Immediately after, Strategy further announced that it would launch a new "42/42 plan" that aims to raise $84 billion over two years to buy Bitcoin. Wall Street analysts supported this, with Benchmark and TD Cowen analysts reiterating a Buy rating on the company, believing that its capital raising strategy is viable.

Unlike most company stocks, which correspond to the market sales performance of the company's products, Strategy shares are positioned as "smart leverage" for Bitcoin. Its founder, Saylor, embodied this narrative when the company changed its name to Strategy. This forms a gap zone of about 45% between traditional assets such as the SPDR S&P 500 ETF and Invesco QQQ Trust, which has volatility levels between 15-20, and Bitcoin, which fluctuates between 50-60. Strategy's common equity targets volatility even higher than Bitcoin itself, aiming to reach volatility levels of 80-90 while maintaining what Saylor calls "smart leverage" through a combination of equity offerings and convertible bonds.

Despite the airdrop sniping, there are also many large institutional investors who have bought into Strategy's strategy, and the recent bets on Strategy by institutional investors have also boosted market confidence. To date, a total of 1,487 institutions hold 139 million shares of Strategy stock, with a total current value of about $55.175 billion, according to Fintel.

Citadel Advisors

Citadel Advisors is one of the largest hedge funds in the world. As of the first quarter of this year, Citadel Advisors held more than $6.69 billion worth of MSTR shares, or about 23.22 million shares, according to the 13F filing, making it one of Strategy's largest shareholders.

As

of Q1 2025, Vanguard Group, one of the world's largest mutual fund management companies, holds about 20.58 million shares of MSTR, worth more than $5.93 billion.

Susquehanna International Group

Susquehanna International Group is a well-known global hedge fund company. As of the first quarter of 2025, the company's holdings of MSTR shares are worth more than $5.73 billion, or about 19.88 million shares.

As of Q1 2025, Jane Street, one of the world's top hedge funds, holds more than 16 million shares of MSTR, worth nearly $4.63 billion, according to Jane Street 13F filings.

According

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

As

of the first quarter of this year, BlackRock, one of the world's largest asset management giants, held about 14.42 million shares of MSTR, worth more than $4.15 billion.

CalPERS

CalPERS is the second-largest public pension fund in the United States, with more than $300 billion in assets under management. As of Q1 2025, CalPERS holds 357,000 shares of MSTR valued at approximately $102 million.