Key Takeaways
- Among global stocks valued above $25B, Strategy (MSTR) carries the highest short interest, representing approximately 14% of its $41.6B market capitalization.
- A significant portion of short positions stems from basis trades rather than outright bearish sentiment — investors purchase Bitcoin ETFs such as IBIT while simultaneously shorting MSTR to exploit the premium.
- Strategy’s Bitcoin holdings total 717,722 BTC valued at roughly $47B, though the company carries approximately $7B in unrealized losses.
- Shares of MSTR jumped roughly 8% on February 25 as Bitcoin rallied 6.5% approaching $68,000.
- The company marked its 100th Bitcoin acquisition, purchasing 592 BTC for approximately $39.8M at an average price of $67,286 per token.
Strategy Inc. (MSTR) has secured an uncommon distinction: holding the largest short position among all publicly traded companies worldwide with market capitalizations exceeding $25 billion.
Approximately 14% of the company’s $41.6 billion valuation has been sold short, based on research from Goldman Sachs and FactSet. This percentage surpasses every other large-cap equity globally by this metric.
However, the narrative underlying this statistic proves more nuanced than initial appearances suggest.
A substantial portion of these short positions don’t represent direct wagers on MSTR’s decline. Rather, many constitute what market participants term basis trades — acquiring Bitcoin exposure via spot ETFs while concurrently shorting MSTR shares to capitalize on the spread between Strategy’s trading price and its underlying Bitcoin asset value.
Jane Street emerges as one prominent player in this space. The trading firm recently revealed holdings exceeding 7 million shares in BlackRock’s iShares Bitcoin Trust (IBIT), coupled with a substantial MSTR position — a textbook example of paired trading strategies.
Brian Brookshire, who specializes in Bitcoin treasury corporations, stated directly: “I suspect a lot of this short interest is still MSTR/BTC basis trade.”
Unrealized Losses Reach $7 Billion
Strategy maintains ownership of 717,722 BTC, amassed beginning in 2020 through convertible debt instruments, equity issuances, and proceeds from its original software operations. The aggregate cost basis stands at $54.56 billion, reflecting an average acquisition price of $76,020 per token.
With Bitcoin hovering around $67,577 during this report, the company faces approximately $7 billion in unrealized losses measured at current market values. These coins remain unsold — the losses exist solely on paper — yet markets constantly reprice expectations, and declining BTC valuations diminish asset coverage against the firm’s outstanding liabilities.
This mechanism explains why MSTR exhibits greater volatility than Bitcoin alone. Financial leverage amplifies movements in both directions.
On February 25, Bitcoin climbed 6.5% toward $68,000. MSTR shares responded with an approximately 8% surge, demonstrating the tight correlation between the two — and illustrating how rapidly short positions can face pressure when BTC appreciates.
Milestone: 100th Bitcoin Acquisition
Earlier during that same week, Strategy disclosed completion of its 100th Bitcoin acquisition since initiating its accumulation program in 2020.
The transaction involved purchasing 592 BTC for approximately $39.8 million, at an average cost of $67,286 per token. Funding came through selling 297,940 Class A shares via its at-the-market equity offering mechanism.
Coinbase (COIN) also appeared in Goldman’s short interest analysis, securing fourth position with short positions equivalent to 11% of its market capitalization.
Nathan McCauley, co-founder and CEO of Anchorage Digital, revealed on February 25 that his digital banking institution maintains holdings of Strategy’s perpetual preferred stock, STRC, within its balance sheet.
MSTR shares have declined approximately 12% year-to-date, with current market capitalization standing at roughly $45.31 billion.
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