Recent developments suggest that the Bitcoin treasury company’s long stock price decline may be nearing an end. The notable change came as Kynikos Associates revealed it had closed its short position in Strategy, the world’s largest corporate Bitcoin holder, suggesting the sector could be bottoming out. This move, combined with other market signals, points to renewed confidence and potential stabilization in crypto stocks amid headwinds across the market.
- Kynikos Associates exited its short position in Michael Saylor Strategy, signaling a turnaround in the market.
- Shares of Bitcoin treasury companies, including Strategy and Metaplanet, have experienced significant declines, but may recover.
- The US government shutdown resolution boosted Bitcoin price and market sentiment.
- Although the market valuations of major companies like MicroStrategy have fallen significantly, there are signs of recovery.
- Market fundamentals for crypto government bonds are likely to strengthen as political and economic uncertainty decreases.
Bitcoin treasury company stock shows signs of recovery after months of decline
The recent unwinding of a significant short position in Strategy, a prominent Bitcoin holder, signals a potential shift in investor sentiment. Kynikos Associates, founded by Jim Chanos, announced that it had exited the strategy’s short trades and entered long Bitcoin trades at the start of trading last week. This move suggests that the bearish trend in the Bitcoin treasury company’s stock price is waning.
Michael Saylor’s strategy has reduced the company’s stock price by about 50% from its peak in 2025, compressing its market net asset value (mNAV) by 1.23 times. Mr. Chanos suggested that it was a strategic decision to cover short sales at mNAV below 1.25x, especially given that mNAV was as high as 2.0x in July 2025. Notably, MSTR’s implied premium, calculated by subtracting the value of its Bitcoin holdings from its corporate value, has shrunk from about $70 billion in July to about $15 billion, suggesting that the company’s asset valuation is more realistic.
There is still potential for further mNAV compression, especially if MicroStrategy issues additional shares, but the core bearish thesis appears to be playing out. As stated by Bitcoin Bond Company CEO Rochard, recent market movements are a positive signal that a reversal is possible.
Meanwhile, many other publicly traded companies that hold Bitcoin have experienced significant declines, with some being forced to sell some of their holdings to pay off debt. The sector’s valuation has been heavily influenced by broader market trends and macroeconomic uncertainties such as the US government shutdown, which has weighed heavily on crypto market sentiment.
Market conditions improve as US government shutdown nears resolution
One of the main headwinds for the crypto market is the ongoing US government shutdown. However, recent reports suggest that the Senate may soon agree on a set of budget bills that could break the deadlock and bring optimism to the crypto ecosystem. Bitcoin reacted positively to this news, rising by around 2% to $106,430 within minutes, highlighting the importance of macroeconomic stability for crypto price stability and investor confidence.
As political uncertainty begins to resolve, the outlook for cryptocurrency markets, particularly Bitcoin prices and related stocks, may further improve, fostering a more favorable environment for investors and institutional investors.