The bottom of the Bitcoin Treasury stock bloodbath may finally be reached.
Jim Chanos, the famed short seller best known for anticipating Enron’s collapse in 2001, said he closed his position in Strategy (MSTR), marking the end of an 11-month MSTR/long bitcoin short. trade. A short position, which involves selling borrowed shares, is a bet that a stock will decline. Closing the position is a sign that further declines are unlikely to be significant.
Chanos, known for exposing corporate overvaluation and accounting excesses, first targeted Strategy when its enterprise value (a figure that includes the company’s preferred and convertible perpetual bonds) far exceeded the value of its bitcoin holdings. At the time, MSTR’s multiple net asset value (mNAV) was 2.5, a significant premium to its underlying bitcoin.
In a note published on
The valuation compression, combined with Strategy’s continued issuance of common stock, allowed the position to close successfully. Chanos added that while there may be room for further mNAV compression – the premium could eventually settle near 1.0, or parity with bitcoin’s adjusted value – the core thesis has largely been met.
Strategy is the largest publicly traded holder of Bitcoin, with 641,205 BTC on its balance sheet, worth around $68 billion at current prices. Unlike every other Bitcoin cash company, which has at some point declined in this cycle, the value of the Tysons Corner, Virginia-based company has maintained a premium.
The outcome coincided with a turbulent year for the Bitcoin cash industry, which saw top names like Metaplanet (3350) and KindlyMD (NAKA) fall more than 80% from their all-time highs.
On Friday, MSTR fell to its 2025 low, down about 20%, as bitcoin rebounded above $105,000, extending its year-to-date gains to about 14%. The unwinding of the short MSTR/long Bitcoin trade could signal a bottom for Bitcoin cash companies.
MSTR shares are up 3% premarket, trading at $248 per share.
