James Chanos Closes MicroStrategy Short as Bitcoin Premium Shrinks

Veteran short-seller James Chanos has officially closed his high-profile trade shorting MicroStrategy (MSTR) while holding long positions in Bitcoin. The decision, announced on November 7, 2025, came after MicroStrategy’s premium to its Bitcoin holdings plunged from 2.5x to just 1.17x, signaling that the stock’s price had realigned more closely with the value of its underlying assets.

MicroStrategy currently holds 641,205 BTC worth approximately $65.4 billion, against a few billion dollars of debt. Despite this, the company’s market capitalization remains around $76 billion. Its stock is down 16% in 2025, while Bitcoin itself has gained about 9% over the same period. According to analysts, the now-closed trade yielded estimated returns of 15% to 35%, demonstrating disciplined market timing amid volatile conditions.

Market strategist Peter Duan noted that Chanos’s move underscores a critical investment lesson — the erosion of Wall Street’s traditional information edge. Duan emphasized that successful short-sellers like Chanos thrive by managing asymmetric risks and identifying overextended valuations. He pointed out that MSTR and Japan-based Metaplanet both saw parabolic, retail-driven rallies disconnected from their fundamentals. Low institutional ownership in these stocks made them attractive short targets, as retail sentiment amplified volatility and correlation with Bitcoin’s price movements.

While Duan remains bullish on the long-term prospects of Bitcoin Treasury companies like MicroStrategy and Metaplanet, he cautioned that investors continue to underestimate their operational complexities. With short pressure easing, MSTR’s next major move will likely depend on Bitcoin’s performance. The episode serves as a reminder of how deeply corporate Bitcoin strategies are now shaping equity market behavior.