Jim Chanos, one of Wall Street’s most famous short-sellers, has taken a unique stance in the crypto space—shorting Strategy’s stock while going long on Bitcoin itself. The move, unveiled at the Sohn Investment Conference and shared with CNBC, flips the script on Chanos’ prior skepticism of digital assets.

Calling it a classic arbitrage play, Chanos likened his strategy to “selling for $2.50 and buying for $1.00”—suggesting that Bitcoin is undervalued relative to equities like Strategy that are heavily tied to BTC holdings.

Why Chanos Thinks Strategy Stock Is Overhyped

Chanos believes that Strategy Inc., formerly MicroStrategy, is grossly overvalued due to its BTC exposure. The company, under Michael Saylor, owns over 568,000 Bitcoin and has seen its market cap balloon thanks to its aggressive buying.

While Strategy’s stock has skyrocketed over 1,500% since 2020, Chanos argues this surge is based more on hype than substance. He says investors looking for Bitcoin exposure are paying a premium through public stocks, which isn’t justified by the underlying BTC value.

“This trade is about pointing out that the emperor has no clothes,” Chanos said, emphasizing that the valuation gap presents a clear market inefficiency.

A Different Perspective on Strategy’s Future

His opinion starkly contrasts with Strategy insiders. Analyst Jeff Walton, for instance, believes the company could become the largest publicly traded firm worldwide, citing its unmatched Bitcoin treasury and potential for exponential growth.

Strategy has already raised $12 billion in capital in just 50 days, all funneled into Bitcoin. Saylor recently outlined a vision of Strategy reaching $10 trillion in value, alongside BTC predictions as high as $13 million per coin.

But Chanos isn’t sold. He believes that Bitcoin itself is a more rational buy, while Strategy’s valuation reflects irrational market enthusiasm.

Chanos’ Newfound Bitcoin Interest—Without the Hype

Though once a vocal critic of Bitcoin—calling it “a poor substitute in a crisis” and warning of its use in illicit finance—Chanos now prefers holding BTC directly.

He has also taken aim at the growing ETF market, warning that Wall Street is more interested in collecting fees than supporting digital assets.

Known for shorting Enron before its collapse, Chanos has a track record of controversial bets. His Tesla short famously failed, but with Strategy, he sees a new mispricing opportunity.

In a market where stock valuations often overshadow fundamentals, Chanos is making a clear distinction: own the asset, not the hype.