Is MicroStrategy's strategy a bubble or an encryption revolution? Wall Street's big short Jim Chanos ignites the MSTR value debate.

Legendary short Jim Chanos, who became famous for shorting, dismissed MicroStrategy's strategy of hoarding bitcoin through high leverage as "financial nonsense", but Michael Saylor, the founder of MicroStrategy, countered that it was a revolution that used other people's capital to achieve thousandfold returns. This article is based on an article written by Wall Street Insight, compiled and written by TechFlow. (Synopsis: Metaplanet CEO Interview: Japanese Hotel to "Asia Micro Strategy", the Bitcoin layout of the stock gainer) (Background supplement: MicroStrategy buys another $530 million BTC position approaching 600,000, Michael Saylor: You only wish you bought more in the first place) A heated debate about corporate strategy, asset value and financial innovation is playing out on Wall Street. At the heart of the debate is the MicroStrategy Strategy (MSTR) under Michael Saylor and its aggressive strategy of hoarding bitcoin massively through high leverage. One side of the clash was legendary short-selling Jim Chanos, who denounced the move as "financial nonsense"; On the other hand, Saylor, who reinvented the company as a crypto giant, sees it as a revolution that uses other people's capital to achieve thousandfold returns. Chanos recently bluntly stated on the media's podcast that Strategy's business model "makes no sense." He repeatedly emphasized his core point: as a company that holds bitcoin, its share price should not enjoy a premium above the value of the assets it holds. This view directly challenges the market frenzy that has sent Strategy's stock price soaring 210% over the past year. The opposite of this was Saylor's tough counterattack. He believes that for many investors, buying Strategy's shares is a more convenient and compliant route than buying Bitcoin or related ETFs outright. More importantly, he painted a blueprint for the market to amplify gains through leverage: "If you want to make 10x, you buy Bitcoin." If you want to make 100x, you buy Bitcoin with someone else's money. If you want to make 1,000x, you buy Bitcoin with someone else's money and then leverage it with Bitcoin." The market performance so far seems to be on Saylor's side. Strategy's share price rose much faster than Bitcoin's roughly 80% and S&P 500 indices gained 13% over the same period. According to data provider S3 Partners, investors shorting Strategy have suffered losses of up to $3.6 billion in the past month alone. However, this debate is not just about the views of two people, but also reveals a new trend that is spreading in the corporate world and its potential risks. The core argument of the bears: the mystery of MSTR's premium Jim Chanos' questioning of Strategy lies in its high valuation premium. As an investor known for spotting and shorting valuation mismatch companies, Chanos believes that instead of buying shares in a company that holds bitcoin at an exorbitant price, investors should buy bitcoin itself outright. According to the data, as of June 30, Strategy has accumulated 597325 bitcoins on its balance sheet, worth about $64 billion, through the issuance of shares and convertible bonds, making it the world's largest bitcoin business holder. However, its share price performance has far outpaced the growth of its underlying assets. This phenomenon is the focus of market skeptics such as Chanos, who argue that this premium lacks solid logic. Saylor's Counterattack: The Crypto Revolution Leveraged In the face of skepticism, Michael Saylor and his supporters made two core arguments. The first is compliance and convenience, and they believe that Strategy's stock provides a compliant channel for regulatory-restricted investors to invest in Bitcoin. Second, proponents believe that with a supply cap of 21 million, Strategy's continued absorption will give it a larger share of scarce assets, supporting its share price premium. Saylor himself is more blunt about his leverage strategy. He said in public that he dismissed Chanos' criticism, saying "I don't think he understands our business model" and predicting that "if our stock goes up, he'll be liquidated and out." Chanos, on the other hand, defined Saylor's remarks as "financial nonsense," calling him "an amazing salesman, but nothing more." The confrontation, which unfolded through the media, has become a hot topic on Wall Street. Growing Doubts and Legal Headwinds Despite the heavy losses of the bears, Chanos is not alone. In May and June, a federal court in Virginia filed two investor lawsuits against Strategy. According to media reports, both lawsuits accuse the company of misleading investors about the impact that bitcoin's price fluctuations may have on its share price. Some analysts have also expressed concern. In a series of recent reports to clients, Gustavo Gala, an analyst at Monness, Crespi, Hardt & Co, noted that Strategy's premium could decline due to limited interest from fixed-income investors in the convertible bonds and preferred shares the company uses to buy bitcoin. He wrote in early June that the company had a "limited runway" to continue its current strategy. The strategy of the imitator wave and the new battlefield Strategy is creating a wave of imitation. From Trump-controlled media companies to popular Meme stock GameStop, dozens of companies have begun to emulate Saylor's "Bitcoin Vault" blueprint. Gala warned in a report Tuesday that "all of these companies are competing for a pool of funds that are superficially similar," fueling the competition. According to data provider Bitcoin Treasuries, listed companies added a total of 245,191 BTC to their balance sheets in the first half of 2025, more than double the increase in Bitcoin ETF holdings over the same period. The latest heavyweight entrant is Fundstrat founder Tom Lee, who will become chairman of bitcoin mining company BitMine Emersion Technologies (BMNR), after helping the company raise $250 million along with several other institutions to launch an Ethereum-centric treasury strategy. Since the announcement on June 30, BitMine's share price has soared more than 30 times. Interestingly, the bears succeeded on another battlefield. According to S3 Partners, imitators who short Saylor are far more profitable than shorting Saylor's own company. In June alone, the bears made a profit of $549 million by shorting the four imitators of the Strategy. This suggests that the market, while fanatical about the frontrunners, is more cautious and skeptical of its followers. 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