Chanos Exits MSTR Short as Bitcoin Treasury Stocks Rebound
James Chanos, founder of Kynikos Associates, closed his 11-month short position on MicroStrategy (MSTR) and exited a long Bitcoin trade on November 7. MSTR shares plunged about 50% from their peak, narrowing the market net asset value (mNAV) premium on its 641,205 BTC holdings from 2.5× to 1.23×. Chanos said that most of his bearish thesis has played out, citing the collapse of valuation from $70 billion to $15 billion.
Industry analysts see this move as a potential bottom for Bitcoin treasury stocks. Pierre Rochard of The Bitcoin Bond Company noted signs of an end to the bear market for bitcoin treasury firms, while Willy Woo expects MicroStrategy to hold its Bitcoin through future downturns. Traders should monitor MSTR for a possible rebound and short-covering rallies.
The exit by one of Wall Street’s most prominent short-sellers signals improving market sentiment. A resurgence in bitcoin treasury stocks could spark renewed investor interest and trading opportunities in the sector.
Bullish
Chanos’s exit from the MSTR short position and his long Bitcoin trade indicates that his bearish thesis has largely played out, suggesting limited downside for bitcoin and bitcoin treasury stocks. Analyst remarks pointing to an end of the bear market and expectations that MicroStrategy will hold its Bitcoin reinforce improving sentiment. This setup could trigger short-covering rallies, boost demand for Bitcoin, and mark a turning point in both the short and long term, driving a bullish outlook.