Legendary short seller Jim Chanos is packing it in.

Since May, the president and founder of Kynikos Associates has been placing bearish bets on the spread between Strategy’s stock price and its Bitcoin holdings.

Throughout 2024 and early 2025, Strategy’s stock was worth far more than the collective value of its Bitcoin holdings.

But then it cratered, and by November 6, the Strategy-to-Bitcoin ratio had fallen to multi-year lows.

Now that the spread has collapsed by more than half, the 68-year-old investment manager is unwinding his wager.

“I can confirm that we have unwound our $MSTR and Bitcoin hedged trade as of yesterday’s open," Chanos said on Friday.

Neither Chanos nor Kynikos Associates responded to a request for comment.

Short sellers turn a profit by borrowing stock in a firm, then selling it in the hopes that the price will drop. If the price falls, they buy back the shares, return them to the lender, and pocket the difference.

Strategy has an mNAV, or market-to-net-asset value, of 1.1x, which is the difference between a company’s market capitalisation and the Bitcoin it holds.

Today, it still stands at that level — a death knell for the company, according to critics like Chanos.

‘financial gibberish’

Chanos’s thesis has a reasonably straightforward logic.

Strategy uses the crypto hype cycle to pump its stock price while buying Bitcoin, creating an arbitrage opportunity for short sellers.

“Strategy, and more ominously its copycats, are selling retail investors the idea that they are buying Bitcoin at a corporate structure so they should value them at a premium,” Chanos told CNBC in May. “It’s ridiculous.”

At the time, Strategy traded at roughly 1.8 times its net asset value — the dollar value of its Bitcoin holdings. In 2020, that figure topped six times.

But Chanos adamantly argued that the premium made no sense.

Saylor, according to him, wanted investors to value Strategy not just on its Bitcoin holdings but on its ability to continuously raise capital and generate “Bitcoin yield” — a concept Chanos dismissed as financial engineering masquerading as innovation.

“Mr. Saylor wants you to value his business based not only on the net value of his Bitcoin holdings, but additionally with a multiple on the change in that NAV!” Chanos wrote on X.

“It’s complete financial gibberish.”

Strategy did not immediately reply to a request for comment.

‘Me too’ trades

Chanos went even further, comparing the Bitcoin treasury boom to the SPAC mania of 2021 that raised $90 billion in three months before collapsing.

“We are seeing SPAC-like 2021 numbers in the Bitcoin treasury market right now,” Chanos said on the Bitcoin Fundamentals podcast in July. “There are reasonably large announcements every day now — hundreds and hundreds of millions of dollars a night.”

SPACs promised easy exits and infinite upside.

Instead, they delivered one of the most brutal post-hype collapses in modern market history. Electric truck startup Lordstown Motors went public via a SPAC, hyped a futuristic factory, then declared bankruptcy in 2023. Shares dropped 98%.

Hydrogen truck play Nikola rocketed on a rolling prototype before its founder was convicted of fraud. Shares are down 95% from the peak.

By mid-2022, the De-SPAC Index had cratered more than 75%.

Chanos sees the same pattern playing out in Bitcoin treasury companies: “me-too” trades built on financial engineering, cheap capital, and euphoria rather than business fundamentals.

And his prediction has been profitable.