Chanos Closes MSTR/Bitcoin Short as Treasury Bear Market Eases

James Chanos, the renowned investor known for his long-standing skepticism toward Bitcoin-related investments, has officially closed his MicroStrategy/Bitcoin hedged trade after maintaining the position for 11 months. The high-profile short seller confirmed the move on social media platform X, stating: “As we have gotten some inquiries, I can confirm that we have unwound our $MSTR/Bitcoin hedged trade as of yesterday’s open.” This development marks the end of Chanos’s bet against MicroStrategy, the corporate poster child for Bitcoin accumulation that now holds over 640,000 BTC and continues buying during market dips.

The closure of Chanos’s position comes at a critical juncture for Bitcoin treasury companies, whose stocks have suffered significant declines from peaks earlier this year. Many analysts had been encouraging investors to short stocks like MSTR, fervently cautioning that a bubble was present in bitcoin treasury companies and warning of an imminent burst. The timing of Chanos’s exit, just as shorting pressure was reaching fever pitch, suggests a potential reversal in market sentiment toward Bitcoin-linked equities.

Meanwhile, the institutional landscape is undergoing a quiet but significant transformation. Traditional finance heavyweights are increasingly participating in Bitcoin markets not as naysayers but as stakeholders and innovators. JPMorgan’s recent maneuvering in BlackRock’s spot Bitcoin ETF, along with a growing number of custody and settlement deals emerging in the news, points to a world where corporate Bitcoin adoption is evolving from “wild west” speculation to boardroom strategy.

This institutional shift is occurring beneath the surface through various channels: pushing up ETF flows, tweaking treasury yield strategies, and rating digital assets on par with traditional securities. The growing involvement of established financial institutions like JPMorgan and BlackRock in Bitcoin ETFs and custody solutions indicates broader acceptance of digital assets within traditional finance frameworks, despite ongoing volatility concerns and regulatory uncertainty.

Pierre Rochard, CEO of The Bitcoin Bond Company and recognized treasury expert, has declared that the bear market for Bitcoin treasury companies is “gradually coming to an end.” In his assessment, the unwinding of institutional short positions represents one of the cleanest signals in the market for a potential trend reversal. “Expect continued volatility, but this is the kind of signal you want to see for a reversal,” Rochard noted, offering cautious optimism for investors who have endured endless bearish sentiment and market value headaches.

The closure of headline short positions, particularly those managed by high-profile skeptics like James Chanos, carries significance beyond mere dollars and cents—it represents a psychological turning point for the sector. For both Bitcoin’s price trajectory and the institutional narrative surrounding corporate Bitcoin adoption, the message appears clear: the worst may be behind, and the next chapter in Bitcoin treasury development isn’t being written by the usual suspects. While regulatory uncertainty and macroeconomic pressures continue to haunt Bitcoin markets, the unwinding of institutional shorts suggests a potential bottoming process for Bitcoin treasury companies that have been battered in recent weeks.