Strategy's Bitcoin leverage game game: Wall Street short sniping, big institutions holding shares bets

Author: Nancy, PANews

As Bitcoin prices return to the high of $100,000 and MSTR stock prices continue to rise, the market's disagreement on Strategy (formerly MicroStrategy) valuation is expanding rapidly. On the one hand, many large global institutions are quietly increasing their holdings of MSTR stocks, viewing them as an important financial tool for indirectly allocating Bitcoin; on the other hand, its highly volatile and deeply leveraged asset structure has also attracted the snipers of Wall Street short sellers. As Strategy continues to increase its exposure to Bitcoin, it is evolving into the focus of the game between the vane of Bitcoin price trend and capital leverage.

Stock price outperforms tech giants and is targeted by big Wall Street

shorts

At the recent Sohn Investment Conference in New York, Jim Chanos, a legendary short seller and former hedge fund manager at Wall Street, said he was shorting Strategy and buying Bitcoin at the same time, saying it was an arbitrage opportunity of "buy for $1 and sell for $2.5".

He pointed out that Strategy holds more than 500,000 Bitcoins through high leverage, and the current stock price has a high premium compared to the actual holdings. He criticized the emergence of a group of companies in the market that imitated Strategy, selling the concept of buying Bitcoin through corporate structures to retail investors and using it to strive for high valuations, calling this logic "absurd".

MicroStrategy's stock price has risen by more than 220% over the past year, while Bitcoin has only risen by about 70%. Chanos believes that this transaction is a "barometer" to observe retail speculation.

Chanos is an influential and well-known investor on Wall Street. As the founder of Kynikos Associates, a hedge fund focusing on short selling strategies, he is known for his in-depth fundamental analysis and keen identification of company financial fraud and business model defects. Classic short selling cases include Enron, WorldCom and Luckin Coffee. But in recent years, he has also suffered serious losses due to shorting Tesla, and some funds have closed or adjusted their strategies.

It is worth noting that this is not the first time that Strategy has become a target of a well-known short seller. In December last year, Citron Research announced that it would short Strategy and also released a report to short MSTR. Although it was bullish on Bitcoin at the time, it believed that MSTR had seriously deviated from Bitcoin's fundamentals. This news once caused a short-term decline of MSTR, but this short selling was ultimately unsuccessful due to the rise in Bitcoin, which led to optimistic market sentiment and the improvement in 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 holdings in recent years. It is disclosed that Jarrod M. Patten, who has served as the company's director for more than 20 years, has sold about $5.2 million in stock since April this year and plans to continue to reduce his holdings by $300,000 this week.

Despite this, MSTR's stock price has remained strong recently. According to MSTR-tracker data, Strategy's total market value currently reaches US$109.82 billion, ranking 183rd in global asset market value. Among them, MSTR has risen by about 37.1% this year, and the increase not only outperforms Bitcoin, but also leads technology giants such as Microsoft, Nvidia, Apple and Amazon.

Q1 financial report lost more than US$4 billion, and received bets from

more than 1,000 institutions

MSTR-tracker data shows that as of May 16, Strategy held a total of 568,840 BTC, and the year-to-date Bitcoin investment yield was 15.65%. According to the latest data estimates, Bitcoin earnings per share (EPS) is expected to reach $37.82 in the quarter.

But in contrast to the considerable bitcoin return rate, Strategy's financial performance in the latest quarter was under pressure due to the Bitcoin price retracement in the later period of the first quarter of this year. The company's recent first-quarter 2025 financial report showed that revenue fell 3.6% year-on-year to US$111.1 million, not meeting market expectations, and its net loss was as high as US$4.23 billion (loss of US$16.49 per share), significantly exceeding market expectations.

To alleviate financial pressure and further expand its Bitcoin asset exposure, Strategy is accelerating its capital operation strategy. Earlier this month, Strategy announced a new $21 billion public market common stock issuance plan and has raised its BTC yield target from 15% to 25%, and its BTC dollar earning target from $10 billion to $15 billion. Immediately afterwards, Strategy further announced that it will launch a new "42/42 Plan" aimed at raising $84 billion to purchase Bitcoin within two years. In response, Wall Street analysts expressed support, and Benchmark and TD Cowen analysts reiterated their buy ratings for the company, believing that its capital raising strategy is feasible.

Unlike most company stocks that correspond to the market sales performance of company products, Strategy stock is positioned as Bitcoin's "smart leverage". Its founder Saylor specifically talks about this narrative when the company was renamed Strategy. Traditional assets (such as the SPDR S&P 500 ETF and the Invesco QQQ Trust, whose volatility levels are between 15-20) and Bitcoin (volatility levels are between 50-60), which creates a gap area of ​​about 45%. Strategy's common stock targets even higher than Bitcoin itself, aiming to reach 80-90 volatility levels while maintaining what Saylor calls "smart leverage" through a combination of equity issuance and convertible bonds.

Although there are airdrops, many large institutional investors have also paid for Strategy's strategy, and the recent bets on Strategy have also increased market confidence. Fintel data shows that so far, a total of 1,487 institutions have held Strategy shares, with a total holding of 139 million shares, with a current total value of approximately US$55.175 billion.

Citadel Advisors

Citadel Advisors is one of the largest hedge funds in the world. According to the 13F document, as of the first quarter of this year, Citadel Advisors held a total of more than US$6.69 billion, with approximately 23.22 million shares, making it one of the largest shareholders of Strategy.

Vanguard Group

As of Q1 2025, Vanguard Group, one of the world's largest public fund management companies, held approximately 20.58 million MSTR shares, worth over US$5.93 billion.

Susquehanna International Group

Susquehanna International Group is a world-renowned hedge fund company. As of the first quarter of 2025, the company held MSTR shares worth more than US$5.73 billion, or approximately 19.88 million shares.

Jane Street

According to the 13F document, as of Q1 2025, Jane Street, one of the world's top hedge funds, held more than 16 million MSTR shares, worth nearly US$4.63 billion.

Capital International

According to 13F documents submitted by Capital International in Q1 this year, the institution holds nearly 14.68 million MSTR shares, worth approximately US$4.23 billion.

BlackRock

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

CalPERS

CalPERS is the second largest public pension fund in the United States, managing more than $300 billion in assets. As of Q1 2025, CalPERS held 357,000 shares of MSTR, worth approximately US$102 million.