Well-known short seller Jim Chanos recently stated in a CNBC interview that companies like Strategy, which raise funds to buy Bitcoin and then use "we own Bitcoin" as a reason to increase company valuation, are extremely absurd. He suggested investors go long on Bitcoin while shorting MicroStrategy for arbitrage.
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ToggleWell-known short seller Jim Chanos
Jim Chanos is a well-known bear investor on Wall Street and the founder of Chanos & Company.
Chanos gained fame in the early 2000s for successfully predicting the collapse of Enron. He focuses on identifying abnormal behaviors in corporate financial reports, especially high-speculative phenomena that the market overlooks. He previously conducted short selling against fraudulent activities and now more observes the market's "irrational exuberance".
He currently manages a family office and continues to provide advice to institutional investors.
Chanos goes long on Bitcoin, shorts MicroStrategy
Jim Chanos mentioned: "In bull markets, investors give premiums for promises; in bear markets, reality gets discounted." He believes that certain market areas are currently returning to a state of "paying a premium for promises", indicating a resurgence of speculative sentiment.
His current recommended trading strategy is to go long on Bitcoin while simultaneously shorting MicroStrategy Strategy. This is an arbitrage strategy that leverages the premium between its stock price and Bitcoin net value.
He criticizes companies like Strategy that raise funds to buy Bitcoin and then use "we own Bitcoin" as a reason to increase company valuation. He finds this approach absurd and points out that these companies are essentially "selling promises and dreams" to retail investors.
He states that the premium between Strategy's market price and net asset value (NAV) is an important indicator of market speculative sentiment. This premium narrowed during recent market volatility but has recently rebounded, indicating strong speculative sentiment.
He uses a "spread trade" strategy, which involves buying Bitcoin while shorting Strategy stock, to bet on the narrowing of this premium. This strategy does not predict Bitcoin's trend but focuses on arbitraging the price difference between the two, a common hedge fund approach.
According to Strategy Tracker data, NAV Premium peaked at 3.4 in November last year, has somewhat fallen this year, and is currently at 1.86.
(MicroStrategy MSTR as a new Bitcoin indicator, mNAV premium ratio and tracking website introduction)
Chanos warns that many market areas are still filled with irrationality and excessive optimism, and investors should be wary of "valuing with dreams". He still believes that short selling remains an effective risk hedging tool, especially in such an environment.
Risk Warning
Cryptocurrency investment carries high risk, and prices may fluctuate dramatically. You may lose all your principal. Please carefully assess the risks.
Cathie Wood has made another surprising move, massively buying eToro on its first day of listing, simultaneously adjusting her ETF portfolio by clearing some Bitcoin holdings and quietly increasing Solana product positions while divesting Block shares.
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ToggleeToro surges 29% on first trading day, Ark buys over $9 million
Ark Invest's Innovation Finance ETF (ARKF) massively bought 140,000 shares of eToro stock on Wednesday, with a total value of $9.4 million, which was also the first day of the crypto and stock trading platform's official listing on Nasdaq. eToro, with the stock symbol "ETOR", was initially priced at $52 per share during IPO and surged 29% on its first trading day, closing at $67, demonstrating strong market demand.
eToro originally filed its IPO application in March but temporarily suspended the plan due to market volatility caused by former US President Trump's tariff policies. This year, as market sentiment stabilizes, multiple crypto-related companies including Circle and Animoca Brands are also preparing to go public.
This is not the first time Ark has acted on an IPO's first day; in April 2021, Ark had already bought 750,000 shares on the day Coinbase went public.
Ark Clears Bitcoin ETF Position Worth $7.9 Million, Maintains Portfolio Balance
While rushing into eToro, Ark also cleared a Bitcoin spot ETF (ARKB) position totaling $7.9 million from ARKF and the Next Generation Internet Fund (ARKW). However, even with this clearance, ARKB remains the top holding in ARKW at 9.5%, valued at approximately $165 million; in ARKF, it is the fourth-largest holding, accounting for 6.1%, or about $62 million.
This adjustment aligns with Ark's consistent investment philosophy—no single asset should exceed 10% of the overall ETF portfolio to ensure asset diversification and risk management.
eToro's Initial Weight in Ark is Low, but Potential is Promising
According to the latest public data, ETOR currently ranks 33rd in ARKW, with a weight of only 0.93%. In comparison, the top three holdings in ARKW are Shopify (9.9%), Coinbase (9.7%), and Robinhood (7.4%), with market values of $100 million, $94 million, and $74 million, respectively.
Although ETOR's current weight is low, if its stock price continues to rise, Ark is expected to rebalance and adjust its weight in the fund.
Ark Simultaneously Bets on Solana, Increases Holding in Canadian-Listed Staking ETF
Notably, in addition to eToro, Ark also bought the Solana staking ETF issued by 3IQ and listed on the Toronto Stock Exchange, totaling $7.6 million, allocated in ARKF and ARKW with weights of about 1% and 0.6%, with market values of $10.3 million and $10.6 million, respectively.
Currently, the SEC has not approved any Solana ETF, but companies like Bitwise, 21Shares, Grayscale, and VanEck have recently submitted applications. Ark's move indicates its optimism about Solana's future opportunities in the ETF market.
Clearing Block Shares, Directing Funds to High-Growth Targets
Ark also sold about 14,930 shares of Jack Dorsey's payment company Block (formerly Square), valued at approximately $873,000. Block's stock rose 0.6% that day, closing at $58.50. This reduction demonstrates Ark's ongoing effort to optimize its portfolio by concentrating funds on newly listed or more promising growth targets.
Risk Warning
Cryptocurrency investments carry high risks, and prices may fluctuate dramatically. You may lose all of your principal. Please carefully assess the risks.
