Famous short seller closes MSTR/BTC position. Is a turning point approaching?

Renowned short-seller James Chanos has officially closed his hedge position in Strategy Inc. ($MSTR) and Bitcoin that he held for 11 months, marking the end of his high-profile short operations targeting Bitcoin-related stocks and the benchmark stock Strategy.

The closing of institutional short positions signals a trend reversal, which may indicate that the darkest days for Bitcoin reserve companies are behind us.

In recent weeks, the ecosystem of Bitcoin reserve companies has suffered heavy blows.

Most related companies’ stock prices have significantly declined from their highs earlier this year. Analysts previously advised investors to short stocks like Strategy and warned that the sector of Bitcoin reserve companies was experiencing a bubble that could burst without warning.

However, just as short-selling pressure peaked, a turning point may be approaching. Last Saturday, Pierre Rochard, CEO of The Bitcoin Bond Company and a seasoned expert in cryptocurrency reserves, stated that the bear market for Bitcoin reserve companies is “gradually coming to an end.”

In his view, closing out institutional short positions is one of the clearest signals in the industry, suggesting that market sentiment may be shifting: “While we expect continued volatility, this signal is a key indicator of a trend reversal.”

Although it’s far from a cause for celebration, for investors who have been struggling with negative sentiment and still dealing with net asset value (mNAV) adjustments, this glimmer of hope is as precious as a refreshing rain after a drought.

James Chanos is a core figure among these short sellers. The well-known investor has always been opposed to assets related to Bitcoin.

His recent closure of the 11-month hedge position in Strategy and Bitcoin also marks the official end of his high-profile short campaign against this “flagship Bitcoin accumulation company.”

Notably, MicroStrategy currently holds over 640,000 Bitcoin and continues to accumulate on dips. Such behavior seems as if its founder, Michael Saylor, has never heard of the concept of “risk management.”

Chanos confirmed this move on the X platform, which immediately sparked heated discussions within the crypto Twitter community, with many posts debating whether the market has already bottomed.

He stated, “In response to many inquiries, I confirm that I closed my hedge position in MicroStrategy and Bitcoin at the market open yesterday.”

Meanwhile, institutional attitudes toward cryptocurrencies are quietly shifting. Traditional financial giants are entering the space, no longer just bearish skeptics but becoming industry stakeholders, market participants, and more importantly, pioneers in crypto reserve innovation.

JPMorgan’s recent strategic moves into Bitcoin spot ETF-related businesses, along with a series of disclosed custody and clearing partnerships, indicate that corporate acceptance of Bitcoin is no longer “wild and unruly exploration” but gradually becoming part of board-level strategic decisions.

Whether it’s driving inflows into exchange-traded products, adjusting reserve yield strategies, or rating digital assets on par with traditional securities, this transformation is quietly progressing.

Of course, this doesn’t mean Bitcoin reserve companies will soon escape volatility. Macroeconomic uncertainties and regulatory fluctuations remain the Damocles sword hanging over Bitcoin.

But the fact that well-known skeptics like Chanos are closing significant short positions is more than just a flow of funds; it marks an important psychological turning point in the market.

Whether for Bitcoin prices or institutional narratives, the signals are very clear: the darkest hours may be behind us, and the next chapter of the industry will no longer be written by the familiar faces of the past.