Is the Bitcoin Bear Market Ending? What The Latest Treasury Trends Reveal

Recent developments suggest that the prolonged downturn in the stock prices of Bitcoin treasury companies might be nearing its end. A notable shift occurred when Kynikos Associates revealed it unwound its short position against Strategy, the world’s largest corporate Bitcoin holder, signaling a possible bottoming out in the sector. This move, coupled with other market signals, indicates renewed confidence and potential stabilization in crypto-related equities amid broader market headwinds.

Shares in Bitcoin treasury companies show signs of recovery after months of decline

The recent unwinding of a significant short position against Strategy, the prominent corporate Bitcoin holder, signals a potential shift in investor sentiment. Kynikos Associates, founded by Jim Chanos, announced that it closed its short trade on Strategy and went long Bitcoin at the start of last week’s trading session. This move suggests that the bearish trend in the shares of Bitcoin treasury firms is waning.

Michael Saylor’s Strategy saw its share price drop approximately 50% from its peak in 2025, with its market Net Asset Value (mNAV) compressing to 1.23x. Chanos indicated that covering the short at an mNAV below 1.25x was a strategic decision, especially given that it had been as high as 2.0x in July 2025. Notably, the implied premium of MSTR, calculated by its enterprise value minus the value of its Bitcoin holdings, shrank from around $70 billion in July to roughly $15 billion, suggesting a more realistic valuation of the company’s assets.

While there remains potential for further mNAV compression, particularly if MicroStrategy issues additional equity, the core bearish thesis appears to be playing out. As Rochard, CEO of The Bitcoin Bond Company, observed, the recent market movements are positive signals for a likely reversal.

Meanwhile, many other publicly traded companies holding Bitcoin have experienced notable declines, with some being forced to offload portions of their holdings to meet debt obligations. 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 primary headwinds for crypto markets has been the ongoing US government shutdown. However, recent reports indicate that the Senate has agreed on a package of budget bills that could soon end the impasse, potentially injecting optimism into the crypto ecosystem. Bitcoin responded positively to the news, rallying roughly 2% to $106,430 within minutes, underscoring the importance of macroeconomic stability for crypto price stability and investor confidence.

As political uncertainties begin to resolve, the outlook for crypto markets—particularly Bitcoin’s price and related equities—may improve further, fostering a more favorable environment for investors and institutional adoption.