The bottom of the bitcoin treasury stock bloodbath may finally be in.
Jim Chanos, the famed short seller best known for anticipating Enron’s collapse in 2001, said he closed his position on Strategy (MSTR), marking the end of an 11-month short MSTR/long bitcoin trade. A short position, which involves selling borrowed shares, is a bet a stock will fall. Closing the position is a sign further declines aren’t likely to be significant.
Chanos, renowned for exposing corporate overvaluation and accounting excesses, first targeted Strategy when its enterprise value (a figure that includes includes the company’s perpetual preferred and convertible notes) went far beyond the worth of its bitcoin holdings. At the time, MSTR’s multiple net asset value (mNAV) was 2.5, a large premium to its underlying bitcoin.
In a note posted on X, Chanos said MSTR shares have dropped roughly 50% from their 2025 peak. The mNAV has compressed to 1.23, prompting Chanos & Co. to recommend covering the trade.
The compression in valuation, combined with Strategy’s ongoing issuance of common stock, has driven the position to a successful close. Chanos added that while there may be room for further mNAV compression — the premium may eventually settle near 1.0, or parity with the bitcoin-adjusted value — the main thesis has largely played out.
Strategy is the largest publicly traded bitcoin holder, with 641,205 BTC on its balance sheet, worth roughly $68 billion at current prices. Unlike all other bitcoin treasury firms, which have at some point slipped into discounts this cycle, the Tysons Corner, Virginia-based company’s value maintained a premium.
The unwind coincided with a turbulent year for the bitcoin treasury sector, which saw the biggest names like Metaplanet (3350) and KindlyMD (NAKA) slump more than 80% from their all-time highs.
On Friday, MSTR fell to a 2025 low, down about 20%, as bitcoin rebounded above $105,000, extending its year-to-date gains to roughly 14%. The unwinding of the short MSTR/long bitcoin trade could signal a bottom in for bitcoin treasury companies.
MSTR shares are up 3% pre-market, trading at $248 per share.
