Cautious Short Seller Issues Warning Over $51M Bitcoin Purchase, Indicating Feeble Appetite for Recent Cryptocurrency Release
In a move that has raised eyebrows in the financial world, Strategy, the world's largest corporate holder of Bitcoin, announced a significant purchase of 430 Bitcoin worth $51.4 million on Monday. This brings Strategy's total Bitcoin holdings to 629,376 BTC, worth approximately $71 billion.
However, this latest Bitcoin purchase has been met with criticism, primarily due to two main issues. Firstly, investors have expressed concern about the weak demand for Strategy's preferred stock offerings. Secondly, there are concerns over the loosening of key shareholder safeguards that allow the company to issue equity at lower multiples, potentially diluting shareholder value.
Famed short-seller James Chanos, known for his role in shorting Enron, has been particularly vocal in his criticism of Strategy's Bitcoin acquisition and the loosening of shareholder protections.
The controversy has been further aggravated by Strategy's stock decline. At $360.98, Strategy's stock is down 1.46% on the day, according to Google Finance. This drop coincides with a sharp decline in the company’s stock price, hitting a four-month low, as market participants reacted negatively to the risk of dilution and the company's increased leverage on Bitcoin price movements.
Industry experts like Ripple CTO David Schwartz have warned about the inherent risk in Strategy’s approach, stating that the company’s fortunes are tightly coupled to Bitcoin’s price movements, essentially making its stock a leveraged bet on Bitcoin’s price.
Despite the controversy, Strategy has defended its actions. In its Q2 2025 earnings report, the company stated that it would only issue stock below 2.5x mNAV to service debt interest or fund dividends on preferred shares, not to buy more BTC. The proceeds from the capital raise were used to acquire 21,021 BTC at an average price of $117,256.
Meanwhile, other companies are also dipping their toes into the world of Bitcoin. Japan's Metaplanet, for example, added 775 BTC for $93 million, bringing its holdings to 18,888 BTC.
Crypto treasuries, it seems, are accelerating the convergence between traditional finance and crypto. Seth Ginns, Managing Partner at CoinFund, stated that this trend is a positive development, as tokens with strong fundamental backdrops are prime candidates for treasury companies.
As the Bitcoin market continues to evolve, it will be interesting to see how Strategy navigates this period of controversy and how other companies follow in its footsteps.
[1] Chanos, James. (2025). Interview with CNBC. [2] Schwartz, David. (2025). Interview with Bloomberg. [3] Strategy Investor Relations. (2025). Q2 2025 Earnings Report.
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