MicroStrategy, now rebranded as Strategy, is under an existential threat potentially causing nearly $3 billion in fund outflows. The MSCI USA and Nasdaq 100 are considering excluding Michael Saylor's company, raising doubts about its Bitcoin accumulation strategy. An awaited decision on January 15 could reshape institutional access to Bitcoin through traditional markets.
The company led by Michael Saylor is going through one of the most critical periods in its history. According to a note reported by Bloomberg, JPMorgan analysts have warned of an imminent risk of Strategy being excluded from the MSCI USA and Nasdaq 100. The simple exit from the MSCI could trigger up to $2.8 billion in forced selling by index funds. Passive investment vehicles exposed to Strategy currently represent nearly $9 billion in market capitalization.
This threat comes at a particularly delicate moment. Bitcoin has lost more than 30% since its October peak, triggering a massive crypto market correction that wiped out more than $1 trillion in market cap. Strategy stock has plunged more than 60% from its November high, pulverizing the premium that once attracted momentum investors and crypto-aligned funds. The company’s valuation now trades barely above the value of its Bitcoin reserves, a ratio that reflects the erosion of market confidence.
MSCI launched a consultation in October proposing to exclude from its global indices any company whose digital assets represent 50% or more of total assets. This rule would transform Strategy into an investment vehicle rather than an operational company eligible for traditional stock indices. Market participants increasingly view these structures as disguised investment funds, a category explicitly excluded from major indices.
Strategy’s position is now untenable under this new framework. The company holds 649,870 Bitcoin acquired for $48.37 billion at an average price of $74,433. These crypto holdings largely dominate its balance sheet, placing the company well beyond MSCI’s proposed 50% threshold. An MSCI spokesperson declined to comment on future index changes, maintaining uncertainty until the expected decision in mid-January.
The implications extend beyond purely technical matters. As JPMorgan analysts led by Nikolaos Panigirtzoglou highlighted, an exclusion would affect liquidity, increase financing costs, and drastically reduce appeal to institutional investors. Active managers are not obligated to follow index changes, but this exclusion would send a negative signal to the entire market.
The mechanism that propelled Strategy for years is no longer functioning. The company would issue shares, buy Bitcoin, then use each price increase to justify new issuances and accumulations. This flywheel created a virtuous spiral where each Bitcoin acquisition boosted the stock price, enabling more capital raising on favorable terms. The premium to net asset value sometimes reached 100% or more, valuing Strategy well beyond its simple crypto reserves.
This mechanism has seized up. The market to net asset value ratio has fallen to 1.1, meaning the stock trades only 10% above the value of its underlying Bitcoin. Investors are no longer paying a significant premium to access Bitcoin through Strategy. This valuation compression reflects a fundamental shift in market perception.
Yet Michael Saylor maintains course with unwavering conviction. Earlier this week, Strategy acquired 8,178 additional Bitcoin for $835.6 million at an average price of $102,171. This acquisition price, significantly higher than the historical average of $74,433, demonstrates that Saylor continues to accumulate even under unfavorable conditions. The company still displays a spectacular performance of over 1,300% since August 2020, when Bitcoin purchases were first disclosed.
The January 15 decision will constitute a crucial test for Bitcoin’s institutional acceptance. Strategy had represented the preferred vehicle for traditional funds seeking regulated and liquid Bitcoin exposure. An exclusion from major indices would call into question this gateway between traditional finance and crypto. Fund managers would then have to choose between indirect exposure via Strategy outside indices or recently approved spot Bitcoin ETFs.
The macro context further complicates the situation. Market sentiment has deteriorated with the widespread crypto correction. Institutional trading volumes have plummeted and technical support levels have been broken on most altcoins. Bitcoin is struggling to maintain $90,000, a critical psychological level that had served as support for several days.
The coming months will determine whether the Strategy model remains viable in a changing regulatory and financial environment. Investors are monitoring three key factors: MSCI’s January decision, the evolution of the market value to Bitcoin held ratio, and Saylor’s ability to continue capital raising. Pressure is mounting on a model that has long defied market conventions.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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