Strategy is now the most shorted stock globally, highlighting a clear shift in market positioning as investors reassess risk tied to its balance sheet. Roughly $9.5B in unrealized losses linked to its large $BTC holdings are weighing on sentiment, reinforcing the view that the company’s equity is effectively a leveraged proxy for BTC.
The surge in short interest suggests growing conviction that downside volatility in Bitcoin could translate directly into equity pressure. It also reflects concerns around earnings sensitivity, balance sheet leverage, and the sustainability of its capital strategy if crypto prices remain weak.
At the same time, elevated short positioning can increase the probability of sharp countertrend rallies if Bitcoin stabilizes or rebounds, given the potential for short covering. In other words, positioning is becoming increasingly asymmetric, with both downside risk and squeeze potential rising.