Investor Jim Chanos is simultaneously betting on bitcoin and against MicroStrategy, a company that is taking a risky strategy on the cryptocurrency with a backing by enthusiastic retail inevstors.

“We’re selling MicroStrategy stock and buying bitcoin and basically buying something for $1 selling it for two and a half dollars,” the former hedge fund magnate told CNBC’s Scott Wapner from the sidelines of the Sohn Investment Conference in New York.

MicroStrategy is considered a proxy for bitcoin as the software and cloud company holds more than half a million of the tokens. However, the company has used leverage to amass its bitcoin stockpile and trades at a large premium to its bitcoin holdings.

“If you look at where MicroStrategy and now, more ominously, some of its copycat companies that are now raising lots of money are doing is they are basically selling retail investors the idea that we are going to buy bitcoin in a corporate structure. Because of what MicroStrategy has done, you should value us at a similar premium,” he said.

However, Chanos labeled that thinking “ridiculous.”

“We’re doing exactly what MicroStrategy and [co-founder and former CEO}Michael Saylor are doing,” he added. “We’re selling MicroStrategy stock and buying bitcoin and basically buying something for $1 selling it for two and a half dollars.”

MicroStrategy shares have soared more than 220% over the past year, while bitcoin has gained nearly 70% during the same period.

President Donald Trump has been a vocal backer of crypto, which has risen sharply since he announced broad-based tariffs in early April.

“This is a good barometer of not only just of the arbitrage itself, but I think of retail speculation,” Chanos said of his trade.

Chanos was founder of Kynikos Associates and now runs a family office while providing advice to institutional clients.