Bitcoin moved above $80,000 in late September 2026, and per Benzinga, short sellers are heavily positioned against three Bitcoin-linked stocks: Strategy Inc (NASDAQ:MSTR), Strive Inc (NASDAQ:ASST) and Coinbase Global (NASDAQ:COIN). S3 Partners data shows high short interest in all three, which the report reads as either a bet the stocks fall or a hedge against Bitcoin's rise.
For a long-term investor, the practical question is not which stock squeezes. It is what this data tells you about how these stocks behave, and whether that changes anything in a portfolio you plan to hold for years. The honest answer: it mostly changes how you read volatility headlines, not what you own. Crypto markets are volatile and losses are possible, and stocks that track crypto inherit that volatility. Readers following this should also see Crypto Market Rules Came Into Focus in Spring 2026.
This piece walks through what the data says, what a short squeeze actually is, and a short checklist for deciding whether any of it matters to you. If you are new to reading market coverage, our investing guides cover the basics of building a portfolio that does not depend on trading signals.
What exactly does the S3 Partners data say?
According to Benzinga's report of the S3 Partners data, published September 28, 2026, three findings stand out. First, Strategy, Strive and Coinbase are all heavily shorted and are described as candidates for short squeezes. Second, all three have correlation coefficients of 0.7 or higher with the price of Bitcoin, while correlating much less with the S&P 500 and Nasdaq 100. Third, the iShares Bitcoin Trust (NASDAQ:IBIT) has low short interest, which S3 Partners reads as evidence that investors hedging Bitcoin are not shorting the ETFs. Instead, they appear to be shorting companies that hold Bitcoin on their balance sheets, like Strategy and Strive, or a major exchange like Coinbase.
That last point is the mechanism worth understanding. A correlation coefficient of 0.7 or higher means the stock tends to move in the same direction as Bitcoin much of the time. Shorting the stock is therefore one way to offset exposure to Bitcoin's price. Shorting IBIT, which holds Bitcoin directly, would be a more direct hedge, and the data suggests traders are not doing that. Why, the report does not say. But the pattern is consistent with traders choosing leveraged or operationally complex proxies over the spot ETF.
What is a short squeeze, in plain terms?
A short seller borrows shares and sells them, hoping to buy them back cheaper. If the price rises instead, short sellers face mounting losses and may be forced to buy shares to close their positions. That buying pushes the price higher, which can force more short sellers to buy. That feedback loop is a short squeeze.
High short interest is the fuel. A rising price is the spark. Neither guarantees a squeeze, and the report itself hedges: Strive's recent rally, up 33.9% over the last month and 210% over the last six months, could lower its squeeze potential because the share price is already elevated. Past performance is past, and none of it predicts what comes next.
Why is Strive the name to watch?
S3 Partners singles out Strive as much smaller and less followed, with a much higher short interest rate. Per the report, around 26% of Strive's shares are short. Smaller, less-followed stocks with heavy short interest are mechanically more squeeze-prone, because a modest amount of buying can move the price further. The report notes that another Bitcoin rally could put the spotlight on Strive's squeeze potential again.
Note what that framing does not include: any view on whether Strive is a good business, fairly valued, or suitable for a long-term holder. High short interest describes positioning, not quality.
A checklist for reading short-interest headlines
When you see a story like this, work through these steps before it changes anything:
- Identify the data source and date. Here it is S3 Partners data reported by Benzinga on September 28, 2026. Short interest changes; old numbers mislead.
- Separate positioning from fundamentals. Short interest tells you what traders are doing. It says nothing about earnings, balance sheets, or long-term prospects.
- Ask who bears the risk. Short sellers manage their own risk. If a squeeze happens, it is a fight between traders, not a windfall for long-term holders who arrived late.
- Check the correlation claim. These three stocks correlated 0.7 or higher with Bitcoin, per the report. That means crypto volatility shows up in the stock, whatever the squeeze does.
- Compare against your own exposure. If you own these stocks through funds, you already hold some crypto-linked volatility. Our crypto market rules coverage explains the regulatory backdrop that shapes these companies.
What does this mean for a long-term portfolio?
The evidence-based playbook here is unglamorous. A short-squeeze story is a trading event, and trading events are noise for a portfolio built on costs, diversification and behavior. If Bitcoin-linked stocks are a small slice of your holdings, a squeeze or a collapse in the shorts' positions should not change your plan. If you find yourself wanting to buy because 26% of shares are short, that is performance chasing dressed as analysis, and the report's own caveat applies: with high volatility in crypto and crypto-related stocks in past years, nothing is out of the question. That cuts both ways.
What the data does establish is structural: traders treat these stocks as Bitcoin proxies, and that linkage, not any squeeze, is the durable fact. A stock that moves with Bitcoin at 0.7-plus correlation will deliver crypto-like swings. Decide whether you want those swings at your current allocation, and ignore the squeeze speculation. For more on how corporate events move the companies inside index funds, see our coverage of how stock buybacks work, another case where a mechanical driver matters more than the headline. We covered a connected angle in How Stock Buybacks Work, and Why They Move Earnings Per Share.
The open question is whether the hedging pattern S3 Partners observed persists if Bitcoin keeps climbing, and whether short interest in these names falls as prices rise. The supplied report does not answer that, and neither can we.
This article is general information, not financial advice. Consider your own circumstances or consult a licensed financial professional.
