Investors in Bitcoin treasury companies may be approaching the end of a downturn in stock prices, as an investment firm has decided to close its short position against MicroStrategy (MSTR). Kynikos Associates’ founder, James Chanos, stated on Sunday that his firm terminated its short on MSTR and a long on Bitcoin (BTC) at the start of Friday’s trading session.

“The Bitcoin treasury company bear market is gradually coming to an end,” said Pierre Rochard, CEO of The Bitcoin Bond Company.

Chanos noted that MSTR shares have decreased by about 50% from their peak values in 2025, and the company’s market Net Asset Value (mNAV) is currently at 1.23x.

“It is prudent to cover this trade with mNAV below 1.25x, as it has dropped from roughly 2.0x since July 2025,” wrote Chanos in a note.

He further mentioned that the implied premium of MSTR has decreased from about $70 billion in July to approximately $15 billion, indicating that the company might now be more appropriately valued.

Despite the possibility of further mNAV compression, especially if more equity is issued, Chanos believes that the investment thesis has essentially played out.

“This is the kind of signal you want to see for a reversal,” added Rochard.

Shares in around 200 publicly traded companies that hold Bitcoin have significantly decreased recently, casting doubt on the viability of Bitcoin treasury strategies according to analysts.

Assessing MSTR and Related Stocks

MicroStrategy has seen the most drastic loss, with its market cap plummeting over 43% from $122.1 billion in July to $69.5 billion by Friday.

Other companies like Metaplanet have also faced significant drops in market value by 56% since June 21.

With pressures in the crypto market seeming to ease, particularly in light of news regarding the U.S. government’s budget discussions, Bitcoin experienced a 2% surge to $106,430 shortly after reports of a potential government reopening. This development could positively impact market sentiment towards cryptocurrencies.