Goldman Sachs Flags Heavy Short Interest in Strategy (MSTR) and Coinbase as Crypto Slides

Investors have turned crypto’s bellwether equities into high-conviction short targets. New Goldman Sachs Research data shows Bitcoin treasury firm Strategy (MSTR) and Coinbase (COIN) sitting near the top of the short-interest league tables among companies valued at $25 billion or more—first and fourth, respectively—at an estimated 14% and 10% of market cap.

Here’s the important part: this is not just “bearish sentiment.” It’s structure. Strategy—formerly MicroStrategy and the largest corporate holder of Bitcoin—has become a preferred vehicle for basis trades. As Bitwise CIO Matt Hougan put it, crypto tends to evoke polarized views, and MSTR’s positioning at the top of the list doesn’t surprise him. He noted that traders have often paired “long Bitcoin, short MSTR,” or run “long the convert, short the stock” setups. Those can be rational when equity implied beta, borrow costs, and convert optionality diverge from spot BTC. Where some get tripped up, Hougan argued, is assuming the company’s survival hinges on Bitcoin staying above its average purchase price—a read of the balance sheet he believes is offside.

Price action has given shorts cover. With Bitcoin sliding from its October peak of $126,080 to $68,614—more than 45% below that high—MSTR has shed roughly 60% over six months. Even with a roughly 9% bounce Wednesday to about $135, the drawdown has translated into approximately $5.3 billion in unrealized losses for Michael Saylor’s firm. Skeptics worry that a deep-enough equity decline could pressure Strategy to sell BTC to address obligations, turning a corporate treasury into forced market supply. The company created a cash reserve in December to fund shareholder dividends, yet it did not categorically rule out future Bitcoin sales. Prediction market users on Myriad—operated by Dastan, Decrypt’s parent—now imply less than a 15% probability that Strategy sells Bitcoin before the end of 2026, down from above 35% earlier this month. Saylor has maintained that Strategy could withstand a severe downturn, even if Bitcoin were to revisit $8,000.

Coinbase has been pulled into the same gravity well. Despite a business that extends beyond Bitcoin, COIN is down around 40% over the last six months amid broader crypto weakness and a fourth-quarter earnings miss. When shares traded near $167, Bernstein’s analysts suggested the stock looked too cheap to exit. On Wednesday, the name gained about 14% and traded above $184, though it remains far below its 52-week high of $444.

Goldman’s screen also captures other crypto-adjacent names: CoreWeave (CRWV), Robinhood (HOOD), and PayPal (PYPL) appear among the most-shorted cohort. Notably, Goldman’s view is based on reported hedge fund holdings as of end-2025; ownership in MSTR and COIN showed no meaningful change from Q3 to Q4, which suggests positioning is more about instrument selection than fund crowding.

What matters from here is the feedback loop between structure and narrative: - If Bitcoin stabilizes, the “long BTC/short MSTR” trade can compress as equity risk premia narrow, borrow becomes expensive, or convert holders cover. That sets the stage for squeezes that do not require fundamental surprises. - If volatility persists, shorts may lean on the idea that equity remains the cleaner hedge than underlying BTC, particularly when capital structure complexity and dividend policy introduce basis friction. - Persistent chatter about forced selling can become self-fulfilling only if liabilities truly bind. Strategy’s reserve and access to capital have, at times, blunted that path, though markets tend to reprice quickly when covenants, liquidity, or collateral dynamics shift.

In practice, short interest here seems as much a referendum on instrument design as on crypto itself. When a listed company functions as a high-beta wrapper around on-chain assets and convertible debt, it becomes the battleground for traders who would rather avoid the frictions of the underlying. That makes MSTR—and to a lesser extent COIN—a sentiment valve for Bitcoin’s cycle, not just a simple bet on price direction.