Renowned critic Peter Schiff has surprisingly identified a practical application for Bitcoin, revealing that it can be utilized to mitigate losses from short positions, according to the Financial Times. He credits Michael Saylor, founder of Strategy, with introducing this unique strategy. According to Schiff, utilizing Bitcoin for hedging against Strategy’s (MSTR) short position could offer a valid rationale for Bitcoin ownership. ,
The strategy, pioneered by Jim Chanos, the renowned short-seller, utilizes buying Bitcoin to potentially offset losses from MSTR short positions. This approach aligns with Chanos’s modus operandi: betting against overvalued companies.
Strategy’s prediction of reaching a $10 trillion valuation has attracted both praise and criticism. Some critics argue that it operates as a proxy for Bitcoin with added risk, while others highlight the high cost of accessing exposure via this route. The strategy is currently seeing positive returns in 2025, up nearly 40%, prompting questions about its long-term sustainability.
It remains to be seen how Chanos’s strategy will unfold.