Strategy's The Most Shorted US Stock: Who's Behind The Massive Position?

Strategy (NASDAQ:MSTR) has become the most heavily shorted U.S. stock at 14% of market cap, but analysts say much of the positioning reflects basis trades rather than bearish bets.

The Short Interest Surge

Short bets on Strategy equal 14% of its $34 billion market cap at the time of the FactSet and Goldman Sachs report, making it the most shorted stock tracked among companies over $25 billion. Coinbase (NASDAQ:COIN) ranked fourth at 11%.

The positioning coincides with roughly $7 billion in unrealized losses on Strategy’s Bitcoin (CRYPTO: BTC) holdings.

The company holds 717,722 BTC worth $47 billion, purchased at an average price of $76,020 per coin.

The Basis Trade Explanation

Analysts say the elevated short interest likely reflects MSTR/BTC basis trades rather than outright bearish conviction. 

Traders buy Bitcoin spot ETFs like BlackRock’s IBIT (NASDAQ:IBIT) while simultaneously shorting MSTR stock to profit from narrowing premiums while staying market neutral.

Brian Brookshire, a specialist in Bitcoin treasury companies, said on X he suspects much of the short interest is basis trading. “Jane Street, in particular, has recently acquired a conspicuously large IBIT position.”

According to 13F filings, Jane Street purchased more than 7 million IBIT shares while also holding a large MSTR position. 

If Brookshire’s assessment holds, Jane Street’s IBIT purchases pair with MSTR shorts as a carry trade.

However, the trade hasn’t worked this year. The MSTR-to-IBIT ratio is up 12%, meaning MSTR outperformed IBIT on the downside. MSTR is down 20% year-to-date while IBIT fell 27%.

The Anchorage Signal

Anchorage Digital, the first federally chartered U.S. crypto bank, disclosed it holds Strategy’s perpetual preferred stock (STRC) on its balance sheet, Coindesk reported on Wednesday.

CEO Nathan McCauley called it “conviction compounding.”

Strategy’s STRC preferred shares pay an 11.25% annual dividend adjusted monthly to stay near $100 par value. 

The shares rank senior to common stock like MSTR while offering steady yields without expiration.

Executive Chairman Michael Saylor responded that “conviction is contagious,” hinting at other firms potentially following Anchorage’s lead.

The Technical Breakdown

MSTR is down 73% from the $475 peak in July 2025. All EMAs stack bearishly: 20 EMA at $134.78, 50 EMA at $155, 100 EMA higher, and 200 EMA at $239.77—nearly double current price.

Critical support sits at $100-$105, representing major structural support from prior consolidation. 

The February spike low touched this zone before bouncing. Breaking below triggers accelerated selling with limited support visible.

Immediate resistance is $134-$135, former support now acting as resistance. Reclaiming this level on volume would signal short-term reversal potential.

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