Strategy Inc Records 14% Short Interest, Carries $7 B Unrealized Bitcoin Loss
Strategy Inc has 14% of its $34 billion market cap sold short—driven mainly by basis trades tied to its 717,722-coin Bitcoin treasury (acquired at $76,020, currently worth $47 billion), resulting in about $7 billion in unrealized losses. Anchorage Digital’s purchase of 11.25%-yielding STRC perpetual preferred shares signals strong institutional conviction ahead of potential follow-on demand.
1. Short Interest Hits 14% of Market Cap
Strategy Inc’s short interest climbed to 14% of its $34 billion market cap, making it the most shorted U.S. stock above $25 billion. This aligns with roughly $7 billion in unrealized losses on its 717,722-coin Bitcoin treasury (average cost $76,020, current value $47 billion).
2. Basis Trades Drive Elevated Shorts
Analysts attribute the heavy short positioning to basis trades, where investors go long Bitcoin spot ETFs while shorting Strategy shares to capture narrowing premiums. Jane Street’s 13F filings show it bought over 7 million ETF shares alongside sizable Strategy positions, though the carry trade is down 12% year-to-date.
3. Anchorage Digital Buys STRC Perpetual Preferred
Anchorage Digital disclosed a stake in Strategy’s perpetual preferred stock (STRC), which pays an 11.25% annual dividend adjusted monthly and ranks senior to common equity. Executive chairman Michael Saylor’s comment that “conviction is contagious” hints at further institutional uptake of the high-yield shares.
4. Technicals Remain Bearish
Strategy shares have plunged 73% from their $475 peak in July, with the 20, 50, 100 and 200-day EMAs stacked bearishly below current levels. Critical support at $100–$105 held the February low, while reclaiming $134–$135 resistance on volume would be required to signal a near-term reversal.