Jim Chanos has seen this movie before — and he says it doesn’t end well.
The legendary short seller that called the 2001 Enron bankruptcy is now sounding the alarm on the booming market for corporate Bitcoin treasuries.
Chanos is comparing it to the SPAC mania of 2021 that raised $90 billion in just three months before crashing spectacularly.
Only this time, it’s public companies issuing convertible notes and preferred shares to buy Bitcoin — and not much else.
“We are seeing SPAC-like 2021 numbers in the Bitcoin treasury market right now,” Chanos said on the Bitcoin Fundamentals podcast this week, adding that there are reasonably large announcements every day now — “hundreds and hundreds of millions of dollars a night.”
It shouldn’t be a surprise that Bitcoin treasuries have become all the rage.
Since Michael Saylor adopted the scheme for his firm, now-called Strategy, the company’s stock has soared more than tenfold. That success has brought in a deluge of other companies that want to mirror the model — and reap the same returns.
Some, like former budget hotel operator Metaplanet, scrapped its previous business model in favour of a Bitcoin treasury scheme. Its market capitalisation has ballooned to $6 billion from $13 million in one year.
SPAC boom and bust
Chanos’s warning is warranted.
SPACs — those blank-check companies that exploded in 2020 and early 2021 — raised $90 billion in just 90 days at the height of the craze.
They promised easy exits, moonshot mergers, and infinite upside. Instead, they delivered one of the most brutal post-hype collapses in modern market history.
Indeed, many of them tanked.
Electric truck startup Lordstown Motors went public via SPAC, hyped a futuristic factory, only to declare bankruptcy in 2023. Its stock dropped more than 98%.
Hydrogen truck play Nikola rocketed on nothing more than a rolling prototype and a catchy narrative. The founder was later convicted of fraud. Shares are down over 95% from their peak.
By mid-2022, the De-SPAC Index, which tracks companies post-merger, had cratered more than 75%.
‘Me too’ trades
Chanos, who’s shorting the premium between Strategy’s stock and its underlying Bitcoin holdings — to then go long on Bitcoin — says capital markets are being flooded with “me-too” Bitcoin trades.
“Now we have to bring in what’s also new in the past handful of months in 2025, and that is the proliferation of me-too strategies,” Chanos said.
Collectively, 154 public companies control about 863,298 Bitcoin worth around $102 billion.
According to Bitcointreasuries.net, 26 firms have become Bitcoin treasuries in the past 30 days.
Just as SPACs were built on cheap capital, investor euphoria, and zero business fundamentals, the new wave of Bitcoin treasury companies are being built on clever financial engineering schemes.
One example is Strategy’s preferred shares. Michael Saylor raised over $1 billion through this model just a few months ago.
Preferred stock lands in between debt and common equity. Similar to bonds, preferred shares usually pay a fixed dividend and tend to be considered less risky than common stock. Whereas debt comes with a maturity date — the day when a loan has to be paid — preferred stock does not.
Holders of preferred shares usually don’t get voting rights, but they do have priority over common shareholders when it comes to dividends.
And since preferred stock never matures, Strategy has no need to repay the principal, nor does it face the same refinancing or liquidation risk as it would with traditional debt.
For Chanos, it’s “complete financial gibberish.”
And just like the SPACs, he warns, it could all implode once the money dries up or sentiment turns.
