Shares in Bitcoin treasury companies may be on the verge of a recovery from a period of subdued price action. This shift follows an announcement from an investment firm that it has closed its short position against MicroStrategy (MSTR), the largest corporate holder of Bitcoin.
James Chanos, the founder of Kynikos Associates, stated on Sunday that his investment firm has unwound its short position on Michael Saylor’s MicroStrategy (MSTR) and concurrently closed a long position on Bitcoin (BTC) at the beginning of the trading day on Friday.
Pierre Rochard, CEO of The Bitcoin Bond Company, commented in response, "The Bitcoin treasury company bear market is gradually coming to an end."
Chanos noted that MicroStrategy shares have declined approximately 50% from their peak in 2025, and the company's market Net Asset Value (mNAV) has compressed to 1.23x.
"It is prudent to cover this trade with mNAV below 1.25x, having dropped from ~2.0x as recently as July 2025," Chanos wrote in a note.
He further elaborated that MSTR's implied premium, calculated as its enterprise value minus the value of its 641,205 BTC holdings, has decreased from roughly $70 billion in July to $15 billion. This suggests that the company may now be more attractively valued.
While MicroStrategy could still face further mNAV compression, particularly if it issues more common equity, Chanos indicated that "the thesis has largely played out."
Rochard added, "This is the kind of signal you want to see for a reversal."
The shares of many of the approximately 200 publicly traded companies that hold Bitcoin on their balance sheets have experienced significant declines in recent months. This trend has led some analysts to question the long-term viability of Bitcoin treasury strategies.
MSTR and Metaplanet Face Significant Mid-Year Declines
MicroStrategy has been the most severely impacted in terms of total value, with its market capitalization falling by over 43% from $122.1 billion in July to $69.5 billion as of Friday.
Metaplanet, which was among the best-performing stocks on the Tokyo Stock Exchange at the beginning of 2025, has also seen its market capitalization decrease by 56% since June 21.
Other companies that have invested in Bitcoin have even been compelled to sell some of their BTC holdings to meet outstanding debt obligations.
Crypto Market Pressure Could Ease Soon
A significant factor contributing to market pressure has been the United States government shutdown. However, multiple U.S. media outlets reported on Sunday that the Senate has reached an agreement to pass a package of budget bills to end the shutdown.
Bitcoin experienced a 2% increase, reaching $106,430 within 50 minutes of these reports, suggesting that the reopening of the government could positively impact sentiment towards the crypto market.