MSTR tops list of most heavily shorted stocks, but don't assume pure bearishness

CoinDesk

by James Van Straten

February 25, 2026

AI-Generated Deep Dive Summary

Strategy (MSTR) has emerged as the most heavily shorted U.S. stock, with short interest accounting for 14% of its $34 billion market cap. However, this doesn't necessarily indicate a strong bearish sentiment towards the company itself. Analysts suggest that much of the short positioning may stem from "basis trades," where traders bet on the price differential between MSTR's shares and the value of its Bitcoin holdings. A basis trade involves buying Bitcoin spot ETFs, such as BlackRock's IBIT, while simultaneously shorting MSTR stock. This strategy aims to profit from a narrowing premium of MSTR's stock relative to its Bitcoin assets. For instance, Jane Street, a major player in cryptocurrency markets, has reportedly accumulated significant positions in both IBIT and MSTR. Such trades reflect an institutional approach to capitalizing on market dynamics rather than a direct bet against the company. The elevated short interest in MSTR highlights the complex interplay between traditional stock markets and crypto assets. While MSTR's Bitcoin holdings have incurred substantial unrealized losses, these do not directly impact its stock price in the short term. The company has amassed over 717,722 BTC worth $47 billion, yet its market cap remains around $42 billion despite a 20% year-to-date decline. This situation underscores how institutional traders are leveraging crypto-related financial instruments to execute sophisticated strategies. By engaging in basis trades, they can navigate market volatility without

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Originally published on CoinDesk on 2/25/2026