Key Takeaways
- Strategy Inc. (MSTR) currently ranks as the globe’s most-shorted stock among firms with market capitalizations exceeding $25 billion, with short positions accounting for approximately 14% of its $41.6B valuation.
- Much of this short activity derives from basis trades — where market participants buy Bitcoin ETFs like IBIT and short MSTR stock to capture valuation discrepancies.
- Strategy’s Bitcoin holdings stand at 717,722 BTC worth approximately $47 billion, though the position carries unrealized losses around $7 billion.
- The stock surged almost 8% on February 25 following Bitcoin’s 6.5% rally toward $68,000.
- Strategy completed its 100th Bitcoin purchase milestone, acquiring 592 BTC for about $39.8 million at roughly $67,286 per coin.
Strategy Inc. (MSTR) has secured an unusual distinction within international financial markets: holding the record for the highest short interest among large-capitalization equities.
According to research from Goldman Sachs and FactSet, approximately 14% of Strategy’s $41.6 billion market value is currently positioned short. This percentage elevates the company above all other major global stocks measured by this criterion.
Yet the forces propelling this elevated short interest tell a more sophisticated story than straightforward bearish positioning.
A considerable fraction of these shorts isn’t motivated by outright pessimism toward Strategy’s business model. Instead, numerous market participants deploy basis trades — purchasing Bitcoin through spot ETF products while concurrently shorting MSTR shares to profit from the differential between the company’s trading premium and its net Bitcoin holdings.
Jane Street has positioned itself prominently in this strategy. Recent regulatory filings indicate the market-making firm controls more than 7 million shares of BlackRock’s iShares Bitcoin Trust (IBIT) coupled with a significant MSTR stake — exemplifying this hedged trading methodology.
Brian Brookshire, an analyst focused on Bitcoin treasury corporations, noted: “I suspect a lot of this short interest is still MSTR/BTC basis trade.”
Nearly $7 Billion in Unrealized Losses
Strategy controls a Bitcoin treasury of 717,722 BTC, accumulated beginning in 2020 using diverse financing methods including convertible notes, share sales, and cash flow from its legacy software business. The total acquisition cost reaches $54.56 billion, translating to an average purchase price of $76,020 per Bitcoin.
With Bitcoin trading near $67,577 at present, the enterprise confronts roughly $7 billion in paper losses on its holdings. Though these remain unrealized — no Bitcoin has been sold — markets value securities on current prices, and lower BTC valuations reduce asset backing against Strategy’s outstanding debt.
This leveraged architecture magnifies MSTR’s price movements compared to Bitcoin’s fluctuations. Financial leverage creates amplified effects in both directions.
During February 25’s trading session, Bitcoin jumped 6.5% approaching $68,000. Strategy’s equity responded with nearly 8% gains, showcasing the strong linkage between the assets — and revealing how quickly short positions face stress during Bitcoin advances.
Century Mark: 100th Bitcoin Purchase
Earlier that week, Strategy announced reaching its 100th Bitcoin purchase since initiating its accumulation strategy in 2020.
The latest transaction consisted of 592 BTC acquired for approximately $39.8 million, averaging $67,286 per coin. The company financed this purchase through selling 297,940 Class A common shares via its at-the-market equity distribution program.
Coinbase (COIN) also ranked highly in Goldman’s short interest study, claiming fourth place with shorts representing 11% of market capitalization.
Nathan McCauley, Anchorage Digital’s co-founder and CEO, disclosed on February 25 that the crypto banking platform holds Strategy’s perpetual preferred shares, STRC, within its corporate balance sheet.
MSTR equity has fallen roughly 12% year-to-date, with current market capitalization approximating $45.31 billion.
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