Citron Research said Friday that its recommendation to short Strategy while staying long Bitcoin has played out as expected, marking one year since the firm publicly argued that the software firm’s valuation had become detached from its underlying economics.
In a post on X, Citron noted that MicroStrategy, now renamed Strategy, has fallen 68% over the past 12 months, while Bitcoin is down roughly 15% over the same period.
“Proud of the timing — and grateful for the luck that always plays a part,” the firm wrote.
The call resurfaced discussion around how investors should value Strategy’s equity relative to the performance of Bitcoin itself. Michael Saylor, the company’s executive chairman, had responded at the time in an interview with CNBC, offering an explanation of what he described as Strategy’s unique economic model.
In that interview, Saylor framed the company as a “Bitcoin treasury company” with exposure built through a mix of direct holdings and capital-market transactions.
“We’re powered by a Bitcoin reactor,” he said, claiming the firm’s $35 billion Bitcoin position allowed it to “sell the volatility” and reinvest the resulting spread into the asset.
Saylor also argued that Strategy’s structure effectively transfers risk and performance from fixed-income instruments to common shareholders, creating what he called “2X Bitcoin, 2X vol” exposure for equity investors.
At the time, Saylor pointed to two financing transactions, a $4.6 billion at-the-market share sale and a $3 billion convertible bond, as examples of how the company captures what he described as “BTC spread.”
He asserted that these spreads generated billions in incremental Bitcoin gains over short periods, and potentially tens of billions to shareholders over longer horizons.
Shorts, he said, misunderstood the model.
“What they miss is that when we borrow money at 6% and invest in Bitcoin, and Bitcoin goes up 30%… we’re getting an 80% BTC spread,” Saylor claimed.
Asked about downside risk, Saylor said the only true threat would be an immediate collapse in Bitcoin itself.
“The number one risk you take is the existential risk that Bitcoin has an extinction-level event,” he said, adding that investors in Strategy’s stock had already accepted that premise.
He also cited Bitcoin’s historical growth rate and argued that buyers of the equity were explicitly seeking leveraged Bitcoin exposure.
“Over the last two weeks, we’ve generated $5.4 billion in BTC gains,” Saylor said at the time. “If you like Bitcoin, then this is a monster for you.”
Citron, however, suggested Thursday that it still does not understand Saylor’s response, linking back to the interview as part of its anniversary post.
The firm’s original thesis centered on MicroStrategy’s valuation premium, which some analysts also described as excessive and the idea that the stock could underperform Bitcoin if investor preference shifted away from levered exposure.