MicroStrategy (MSTR) Stock at a Turning Point as Short Seller Unwinds Bet?
The Bitcoin treasury sector, which has been through a lot of trouble, may finally be seeing the light at the end of the tunnel. James Chanos
Quick overview
- James Chanos has closed his hedge position against Strategy, signaling a potential market reversal for the Bitcoin treasury sector.
- Despite recent challenges, Strategy remains committed to its Bitcoin-first strategy, recently acquiring 397 BTC to increase its total holdings to over 641,205 BTC.
- The company's stock has faced significant declines, with concerns over debt commitments and a drop in its market premium over Bitcoin assets.
- Analysts note that MSTR stock is approaching a critical support level, coinciding with Bitcoin's psychological barrier of $100,000.
The Bitcoin treasury sector, which has been through a lot of trouble, may finally be seeing the light at the end of the tunnel. James Chanos, a famous short seller, has officially closed his hedge position against Strategy (formerly MicroStrategy), the world’s largest corporate Bitcoin holder. This ends an 11-month bet against the company’s aggressive strategy for accumulating cryptocurrency. This could be a sign of a major market reversal.
Chanos, who started the financial firm Kynikos Associates and is currently the head of Chanos & Co, said on social media that his business closed both its short position on Strategy (MSTR) and its long position on Bitcoin on November 7, 2025. Chanos made his declaration when MSTR shares were trading about $241, which was about 50% lower than their peak in 2025.
Chanos noted in a note to clients that “the thesis has mostly played out,” pointing to the fact that Strategy’s market Net Asset Value (mNAV) has gone from almost 2.0x in July 2025 to barely 1.23x. The company thought it was “prudent to cover this trade with mNAV below 1.25x,” which means that the market has already priced in much of the predicted drop.
Strategy (MSTR) at a Psychological Turning Point
Market watchers see Chanos’s exit as more than just a good move; they see it as a possible turning point for the whole Bitcoin treasury ecosystem. Pierre Rochard, the CEO of The Bitcoin Bond Company, said, “The Bitcoin treasury company bear market is slowly coming to an end.” He also said that the unwinding of institutional short positions is “the kind of signal you want to see for a reversal.”
The effects go beyond only Strategy. Around 200 companies that are publicly traded now have Bitcoin on their balance sheets. Many of these companies have seen their stock prices drop sharply in the last few months. Metaplanet, a Japanese company that used to do quite well on the Tokyo Stock Exchange, has lost 56% of its market value since June 2021.
Strategy’s Unwavering Bitcoin-First Commitment
Michael Saylor, the executive chairman of Strategy, is still committed to his Bitcoin-first goal, even though the market is unstable. The corporation reportedly said it bought 397 BTC for $45.6 million between October 27 and November 2. This brought its total holdings to 641,205 Bitcoin, which are worth over $65 billion at current pricing.
Saylor posted an updated portfolio chart on social media with the simple comment “Best continue.” This made it clear that plan’s accumulation plan hasn’t changed, even though the market is skeptical. The corporation presently holds around 3.1% of all Bitcoin, with an average cost basis of $74,064 per coin and unrealized gains of over $18 billion.
MSTR’s Market Challenges and Dilution Concerns
But Strategy’s road hasn’t been easy; it has faced a lot of problems. The company just generated $715 million by selling more Series A Perpetual Stream Preferred Stock (STRE). The stock pays a big 10% yearly dividend that can go up to 18% if payments are put delayed. This aggressive way of getting money has made investors wary, and shares fell as low as $221.50 in pre-market trading after the announcement.
The stock’s premium over its Bitcoin holdings, which was as high as 2.5x when Chanos started his short position in December 2024, has now dropped to about 1.3x based on enterprise value. This drop shows that the market is worried about more and more debt commitments, which now number roughly $14.4 billion, and the company’s stock price going down.
The implied premium of Strategy, which is its enterprise value minus the value of its Bitcoin assets, has dropped from $80 billion in November 2024 to barely $15 billion now. This suggests that investors are reevaluating the value of the Bitcoin treasury model.
Strategy (MSTR) Stock: Technical and Fundamental Crossroads
From a technical point of view, MSTR stock has broken through important support levels, especially the $250–$260 region that acted as a floor for most of 2025. Analysts, on the other hand, say that the stock is getting close to a key support level at $230, which is in line with Bitcoin’s psychological barrier of $100,000 and Strategy’s 100-week moving average.
The company’s operations have also been affected by problems. In the third quarter, revenue fell from $10 billion in the second quarter to $2.8 billion. In October, S&P Global Ratings gave Strategy a B- credit rating, which is 15 notches below AAA and firmly in the non-investment grade range. The rating agency said that the company’s large amount of Bitcoin holdings was a major risk factor.
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