Strategy (MSTR) has emerged as the most heavily shorted U.S. stock, with bearish positions equaling 14% of its market capitalization, according to recent Goldman Sachs data At the same time, cryptocurrency exchange Coinbase (COIN) ranks fourth with 11% short interest among stocks valued over $25 billion.
Despite the high short interest, experts caution that this may not signal pure bearish sentiment toward the stock. Much of the activity appears tied to complex trading strategies, particularly the MSTR-Bitcoin basis trade. This approach involves pairing long positions in bitcoin related ETFs with short positions in Strategy shares to capture price differences while remaining market neutral.
Brian Brookshire, specialist in bitcoin treasury companies, said;
Basis Trades Drive Positioning
Firms like Jane Street have taken substantial positions in both Strategy and BlackRock’s iShares Bitcoin Trust (IBIT). By combining a short MSTR position with a long IBIT stake, traders aim to profit from the narrowing of Strategy’s premium relative to its bitcoin holdings rather than betting on a stock decline.
Currently, Strategy holds more than 717,000 BTC, valued at approximately $47 billion, while the stock’s market cap stands around $42 billion. Year-to-date, Strategy shares are down 20%, while IBIT has fallen 27%, suggesting that the paired trade has faced challenges this year.
The elevated short interest underscores the growing complexity of crypto-linked equities. Investors should interpret MSTR’s positioning carefully, recognizing that high short ratios may reflect hedging strategies rather than outright negative sentiment.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.