Investment Firm Closes Short Position on Bitcoin Treasury Leader
Shares of major Bitcoin treasury companies may be entering a new phase after an investment firm disclosed it had closed a key short position. Kynikos Associates founder James Chanos announced Sunday that his firm ended its short stance on Strategy (MSTR), the company with the largest corporate Bitcoin holdings, at the start of the trading day Friday. Chanos also closed a long Bitcoin position at the same time.
Signals of Changing Market Sentiment
Chanos stated that shares in Strategy have dropped roughly 50% from their 2025 peak, noting the company's market Net Asset Value (mNAV) has compressed to 1.23x from nearly 2.0x in July 2025. He wrote, "It is prudent to cover this trade with mNAV below 1.25x, having dropped from ~2.0x as recently as July 2025." This suggests the notable premium for holding the company's shares, calculated as enterprise value minus its Bitcoin reserves, has fallen from $70 billion in July to $15 billion currently.
- MSTR's market cap fell from $122.1 billion in July to $69.5 billion as of Friday.
- Metaplanet, also prominent on the Tokyo Stock Exchange, similarly saw its market cap drop since June 21.
Chanos concluded that while further compression is possible if the company issues more equity, "the thesis has largely played out." Some industry figures, including The Bitcoin Bond Company CEO Pierre Rochard, viewed this as a potential reversal signal for the sector.
Context: Broader Declines in Bitcoin Treasury Stocks
Sustained declines have affected several companies holding Bitcoin as part of their treasury strategy. Some have reduced holdings or sold assets to pay outstanding debt. This has led to questions about the sustainability of these strategies given recent market conditions.
Market headwinds have included pending political factors, such as a U.S. government shutdown. On Sunday, reports emerged that the U.S. Senate reached an agreement to end the shutdown, which was quickly followed by a 2% Bitcoin price uptick to $106,430. This development may support improved sentiment across both the cryptocurrency markets and the stocks of companies holding Bitcoin on their balance sheets.
Outlook
The reduction of short positions and contracting market premiums are being interpreted by some observers as signs that bearish trends in Bitcoin treasury stocks might be losing steam. Market participants will be watching closely for further signals of stabilization or recovery in this sector.
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