The bottom of bitcoin’s treasury stock carnage may finally be in.
Jim Chanos, the famed short seller best known for predicting Enron’s collapse in 2001, said he was closing 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 that a stock will fall. Closing the position is a sign that further declines are unlikely to be significant.
Known for exposing the company’s overvaluation and accounting excesses, Chanos first targeted the strategy when its enterprise value (a figure that includes the company’s perpetual preferred and convertible notes) far exceeded the value of its bitcoin holdings. At the time, MSTR’s net asset value (mNAV) multiple was 2.5, a large premium to its underlying bitcoin.
In a note posted on X, Chanos said MSTR shares are down about 50% from their peak in 2025. mNAV has compressed to 1.23, prompting Chanos & Co. to recommend coverage of 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 could eventually fall near 1.0 or parity with the bitcoin-adjusted value — the main thesis is largely played out.
Strategy is the largest publicly traded bitcoin holder with 641,205 BTC on its balance sheet, worth around $68 billion at current prices. Unlike all other bitcoin tax companies, which have fallen into discounts at some point in this cycle, the Tysons Corner, Virginia-based company’s value maintained a premium.
The relaxation coincided with a turbulent year for the bitcoin treasury sector, with top names such as Metaplanet (3350) and KindlyMD (NAKA) falling more than 80% from their all-time highs.
On Friday, MSTR fell to a 2025 low, down about 20%, as bitcoin returned to 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 tax companies.
MSTR shares are up 3% premarket and are trading at $248 a share.
