- Kynikos Associates closed its short on MicroStrategy, hinting at a potential market reversal.
- MSTR’s valuation premium has dropped sharply, suggesting healthier pricing.
- Bitcoin rose after the U.S. government shutdown deal, boosting crypto sentiment.
Shares of Bitcoin-holding companies may be turning a corner after months of underperformance. The shift comes as prominent investor James Chanos announced his firm, Kynikos Associates, has closed its short position against MicroStrategy (MSTR), signaling a potential end to the bearish cycle surrounding corporate Bitcoin treasuries.
Chanos Closes Bet Against MicroStrategy
Chanos revealed that Kynikos closed its short on MSTR and a long position on Bitcoin at the start of Friday’s session. MicroStrategy shares have fallen nearly 50% from their 2025 high, with the company’s market Net Asset Value (mNAV) shrinking to 1.23x — down from 2.0x in July.
“It’s prudent to cover this trade with mNAV below 1.25x,” Chanos noted, explaining that the company’s implied premium—its enterprise value minus the value of its 641,205 BTC holdings—has plunged from $70 billion in July to just $15 billion. According to him, this adjustment means the valuation has largely “normalized.”
Market Reversal Signals Strength for Bitcoin Treasuries
Pierre Rochard, CEO of The Bitcoin Bond Company, said Chanos’ move might mark the end of the “Bitcoin treasury bear market.” He called the decision “the kind of signal you want to see for a reversal.”
MicroStrategy isn’t alone in facing losses. Japan’s Metaplanet, one of 2025’s top-performing early-year stocks, has seen its market cap drop 56% since June. Other Bitcoin-holding firms have also sold parts of their BTC reserves to manage debt, reflecting broader market strain.
Also Read: Reasons XRP Could Outperform Bitcoin Again — Experts Say Now Is the Time
Government Deal Eases Pressure on Crypto Markets
A major headwind for Bitcoin-related equities—the U.S. government shutdown—appears to be ending. Reports on Sunday confirmed that the Senate reached a deal to pass budget bills, which lifted market sentiment. Within 50 minutes of the news, Bitcoin rose 2% to $106,430, signaling renewed optimism across the crypto space.
While volatility remains, the unwinding of bearish positions and improved macro signals could point to a near-term recovery for Bitcoin treasury stocks. If confidence returns, companies like MicroStrategy and Metaplanet may lead a rebound in corporate Bitcoin exposure.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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