Strategy Under Fire: What Short Bets Mean for Bitcoin

Strategy Under Fire: What Short Bets Mean for Bitcoin

The largest institutional Bitcoin holder is in the crosshairs of short sellers: Strategy, Michael Saylor's company, currently leads the list of most heavily shorted large US corporations. With 717,722 BTC on its balance sheet and a stock that has fallen approximately 80% since November 2024, the question arises: Is this a coordinated attack on Bitcoin – or merely rational market mechanisms? The analysis reveals a significantly more nuanced picture than sensational headlines suggest.

The Facts

A chart from a report by major bank Goldman Sachs shows Strategy at the end of 2025 with a short interest of 14% at the top of all US companies with a market capitalization exceeding $25 billion ^[1]. Short interest is calculated by the ratio of shorted shares to a company's market capitalization. In short selling, traders borrow shares and sell them with the intention of buying them back at lower prices ^[1].

Strategy stock (MSTR) is currently trading below the $130 mark again, 50 percent below last year's level ^[2]. Since its all-time high in November 2024, MSTR has even fallen by approximately 80% ^[1]. Strategy currently holds 717,722 Bitcoin worth around $46.68 billion. The average purchase price is approximately $76,020 per Bitcoin, which at a current price of around $66,000 represents an unrealized loss of about $7 billion ^[2].

For Strategy, the weak performance of recent months is a problem, as the issuance of common stock represents the primary capital raising method. In 2024 and 2025, the corporation raised $16.3 billion each year through this method ^[1]. Strategy is considered a leveraged equity proxy for Bitcoin: The company raises capital through stock and bond issuances and invests the proceeds in BTC ^[2].

Some media outlets interpreted the figures as evidence of an aggressive attack. The crypto medium Cointelegraph claimed, for example, that Strategy had now become the most shorted company in the world – obvious misinformation, as the chart explicitly refers only to US companies with a market capitalization exceeding $25 billion ^[1]. The Financial Times also misleadingly noted that Strategy had not been on the list a year earlier. However, a look at Goldman Sachs' report from February 2025 shows that Strategy (then still MicroStrategy) was also in first place – with a short interest of 10% ^[1].

In his speech at the "Bitcoin for Corporations" event, Saylor once again emphasized his position: "I promise not to sell the Bitcoin. We specialize in not selling bitcoins. We've gotten very good at it. We have a PhD in hodling" ^[1].

Analysis & Assessment

Strategy's 14% short interest may seem alarming at first glance, but historical context significantly puts things in perspective. Data from chartexchange shows that short interest in November 2024, when MSTR stock reached its all-time high, temporarily exceeded 17% – and has actually declined since late 2025 ^[1]. In spring 2024, the ratio was approximately 20%, followed by a major rally ^[1]. Strategy is far from the most heavily shorted company: The telehealth company Hims & Hers, for example, currently has a short interest of over 30% ^[1].

Crucially, the motivation behind the short positions matters. These do not necessarily represent a bet against Bitcoin. A popular trade in recent months was to short Strategy while simultaneously being long Bitcoin – notably implemented by well-known investor Jim Chanos. This allowed profiting from Strategy's declining premium, independent of Bitcoin price movements. Strategy is now worth approximately the value of its Bitcoin holdings minus debt, which already prompted Chanos to unwind his bet ^[1].

Strategy's fundamental position is more stable than widely assumed. With its built-up cash reserve, the company can meet its payment obligations (preferred stock dividends and convertible bond interest) for approximately 2.5 years without needing to raise additional money through common stock issuance ^[1]. According to management, the Bitcoin price would have to fall back into four-digit territory and remain there until 2032 for Strategy to face serious problems ^[1]. At the current time, it seems highly unlikely that the company could be forced to sell Bitcoin.

The current situation rather demonstrates the challenges of a leveraged Bitcoin proxy in volatile market phases. In upward phases, the business model amplifies price gains; in downturns, pressure increases accordingly. Since the first Bitcoin purchase, MSTR is nevertheless up more than 900%, while BTC has "only" increased approximately fivefold in the same period ^[1].

Conclusion

• Strategy's 14% short interest is neither historically exceptional nor an indicator of a targeted attack – in November 2024 it was even higher at over 17%, and in spring 2024 it was approximately 20%

• Short positions in Strategy are not necessarily bets against Bitcoin, but often trades against the company's declining premium with a simultaneous long position in BTC

• Strategy is fundamentally well-positioned: The company can meet its payment obligations for approximately 2.5 years and would not face serious difficulties even with a four-digit Bitcoin price until 2032

• The media portrayal as the "world's most shorted stock" is misleading and refers only to large US corporations with over $25 billion market capitalization – many smaller companies have significantly higher short interest ratios

• The example demonstrates the volatility of leveraged strategies in both directions: While Strategy has gained over 900% since its first Bitcoin purchase, it now faces its stress test in difficult market phases