{"id":90827,"date":"2025-11-10T12:36:30","date_gmt":"2025-11-10T09:36:30","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=90827"},"modified":"2025-11-10T12:40:35","modified_gmt":"2025-11-10T09:40:35","slug":"investors-signal-market-shift-by-exiting-shorts-against-strategy","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/investors-signal-market-shift-by-exiting-shorts-against-strategy\/","title":{"rendered":"Investors Signal Market Shift by Exiting Shorts Against Strategy"},"content":{"rendered":"<p>Kynikos Associates has closed its short position against Strategy&#8217;s shares and its long position on the leading cryptocurrency, according to the firm&#8217;s founder, James Chanos.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">As we have gotten some inquiries, I can confirm that we have unwound our <a href=\"https:\/\/twitter.com\/search?q=%24MSTR&#038;src=ctag&#038;ref_src=twsrc%5Etfw\">$MSTR<\/a>\/Bitcoin hedged trade as of yesterday\u2019s open. <a href=\"https:\/\/t.co\/lgrWNy35H8\">pic.twitter.com\/lgrWNy35H8<\/a><\/p>\n<p>\u2014 James Chanos (@RealJimChanos) <a href=\"https:\/\/twitter.com\/RealJimChanos\/status\/1987153597079949732?ref_src=twsrc%5Etfw\">November 8, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>This move may indicate the end of the decline in the stock prices of public companies holding bitcoin in their reserves.<\/p>\n<p>Chanos explained the decision by noting that the premium to the company&#8217;s net asset value (mNAV) <a href=\"https:\/\/www.strategy.com\">fell to 1.23x<\/a>.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cIt makes sense to close this trade with mNAV below 1.25x. Back in July 2025, the figure was around ~2.0x,\u201d wrote Chanos.<\/em><\/p>\n<\/blockquote>\n<p>According to him, Strategy&#8217;s premium\u2014the difference between the company&#8217;s market capitalization and the value of its bitcoin reserves of 641,205 BTC\u2014shrank from $70 billion in July to $15 billion. This suggests a more fair market valuation of the company. Chanos added that \u201cthe idea has mostly played out.\u201d<\/p>\n<p>The CEO of The Bitcoin Bond Company, Pierre Rochard, described this event as a market reversal signal.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">The bitcoin treasury company bear market is gradually coming to an end. Expect continued volatility but this is the kind of signal you want to see for a reversal. <a href=\"https:\/\/t.co\/Z9OBH57u5J\">https:\/\/t.co\/Z9OBH57u5J<\/a><\/p>\n<p>\u2014 Pierre Rochard (@BitcoinPierre) <a href=\"https:\/\/twitter.com\/BitcoinPierre\/status\/1987163868813054381?ref_src=twsrc%5Etfw\">November 8, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cThe bear market for bitcoin companies is gradually coming to an end,\u201d he stated.<\/em><\/p>\n<\/blockquote>\n<p>In recent months, the shares of many of the 200 public firms with bitcoin on their balance sheets have significantly declined. The market value of Strategy <a href=\"https:\/\/companiesmarketcap.com\/microstrategy\/marketcap\/#google_vignette\">dropped by 43%<\/a>\u2014from $122.1 billion in July to $69.5 billion. Japanese company Metaplanet <a href=\"https:\/\/companiesmarketcap.com\/metaplanet-inc\/marketcap\/\">lost 56%<\/a> of its capitalization since June 21.<\/p>\n<p>Some firms had to <a href=\"https:\/\/forklog.com\/en\/news\/dat-firm-sequans-sells-970-btc-to-reduce-debt-amid-bitcoin-slide\">sell<\/a> part of their bitcoins to pay off debts.<\/p>\n<p>Additional pressure on the market was exerted by the <a href=\"https:\/\/forklog.com\/en\/news\/what-a-us-government-shutdown-would-mean-for-crypto\">shutdown<\/a> of the US government. However, the media <a href=\"https:\/\/forklog.com\/en\/news\/prospects-of-ending-the-u-s-shutdown-perk-up-crypto-markets\">reported<\/a> on a budget agreement being reached. Against this backdrop, the price of bitcoin rose by 2% in 50 minutes, reaching $106,430.<\/p>\n<h2 class=\"wp-block-heading\">\u201cLong DAT, Short Futures\u201d<\/h2>\n<p>The introduction of regulated futures on altcoins has opened a new way for traditional investors to profit in the crypto market, stated Chris Perkins, president of CoinFund, to <a href=\"https:\/\/www.coindesk.com\/opinion\/2025\/11\/05\/long-dats-short-futures-a-new-wrinkle-on-the-basis-trade\">CoinDesk<\/a>.<\/p>\n<p>The strategy of <a href=\"https:\/\/en.wikipedia.org\/wiki\/Basis_trading\">basis trading<\/a> involves simultaneously buying shares of companies with crypto assets on their balance sheets (DAT) and selling futures on the underlying asset. This allows for income without direct token ownership.<\/p>\n<p>Digital Asset Treasuries (DAT) are public companies that raise capital through stock issuance and invest it in digital currencies.<\/p>\n<p>Such firms act as a bridge between <span data-descr=\"traditional finance\" class=\"old_tooltip\">TradFi<\/span> and the crypto industry. Their shares provide investors with regulated access to the digital asset market, reducing operational risks.<\/p>\n<p>For instance, Strategy&#8217;s shares have increased 22 times since it began purchasing bitcoin, while the asset itself has risen tenfold over the same period.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"397\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/img-0d48dd8e6c50326f-9159882176050775-1024x397.png\" alt=\"Strat_vs_BTC\" class=\"wp-image-269316\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/img-0d48dd8e6c50326f-9159882176050775-1024x397.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/img-0d48dd8e6c50326f-9159882176050775-300x116.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/img-0d48dd8e6c50326f-9159882176050775-768x298.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/img-0d48dd8e6c50326f-9159882176050775-1536x596.png 1536w, https:\/\/forklog.com\/wp-content\/uploads\/img-0d48dd8e6c50326f-9159882176050775-2048x794.png 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Hypothetical returns on investments in Strategy and bitcoin. Source: <a href=\"https:\/\/portfolioslab.com\/tools\/stock-comparison\/MSTR\/BTC-USD\">PortfoliosLab<\/a>.<\/figcaption><\/figure>\n<h2 class=\"wp-block-heading\">New Opportunities<\/h2>\n<p>For a long time, basis trading was limited due to the lack of regulated derivatives. The situation changed following a policy shift by the <span data-descr=\"U.S. Securities and Exchange Commission\" class=\"old_tooltip\">SEC<\/span>.<\/p>\n<p>The new head of the Commission, Paul Atkins, <a href=\"https:\/\/forklog.com\/en\/news\/sec-chair-suggests-limited-tokens-as-securities\">stated<\/a> that \u201cmost tokens are not securities.\u201d This paved the way for the launch of futures on various altcoins and increased market liquidity.<\/p>\n<h2 class=\"wp-block-heading\">How the Strategy Works<\/h2>\n<p>An investor buys DAT shares and simultaneously opens a short position on the futures of the same crypto asset. This approach eliminates price risk, and income is generated from the difference between the spot and derivative prices.<\/p>\n<p>When derivatives trade at a premium to the underlying assets (a \u201ccontango\u201d situation), the strategy can yield stable income. With altcoins, potential profits may be higher compared to bitcoin.<\/p>\n<p>Perkins noted that the strategy is not without risks. If the market capitalization of a DAT falls relative to the value of its crypto assets, hedging with futures may not cover the losses.<\/p>\n<p>However, he believes these instruments play a crucial role in \u201cnormalizing crypto investments on Wall Street.\u201d<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cThis could be the trade of 2026,\u201d concluded the head of CoinFund.<\/em><\/p>\n<\/blockquote>\n<p>Back in November, Bitwise&#8217;s Chief Investment Officer Matt Hougan <a href=\"https:\/\/forklog.com\/en\/news\/bitwise-cio-says-crypto-treasuries-risk-irrelevance-without-complex-strategies\">pointed out<\/a> the inefficiency of digital asset treasuries.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kynikos Associates has closed its short position against Strategy&#8217;s shares and its long position on the leading cryptocurrency, according to the firm&#8217;s founder, James Chanos.<\/p>\n","protected":false},"author":1,"featured_media":90828,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"Kynikos Associates closes short position against Strategy's shares.","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1207,1138,1473],"class_list":["post-90827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-microstrategy","tag-opinions","tag-reserve-currencies"],"aioseo_notices":[],"amp_enabled":true,"views":"113","promo_type":"1","layout_type":"1","short_excerpt":"Kynikos Associates closes short position against Strategy's shares.","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/90827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=90827"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/90827\/revisions"}],"predecessor-version":[{"id":90829,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/90827\/revisions\/90829"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/90828"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=90827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=90827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=90827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}