Bitcoin exposure puts Strategy at risk
Strategy (formerly MicroStrategy) faces mounting pressure as fears grow over its potential removal from major equity indices. Shares closed Thursday down 5.02%, trading near multi‑month lows. Analysts at J.P. Morgan warn that the company’s underperformance relative to Bitcoin reflects investor anxiety ahead of MSCI’s January 15 decision, which could reshape its market standing.
In a Wednesday note, J.P. Morgan estimated that Strategy could face $2.8 billion in passive outflows if MSCI removes it from its benchmarks. If other providers follow suit, the figure could rise to $8.8 billion. Analysts led by Nikolaos Panigirtzoglou stressed that while active managers are not obliged to follow index changes, exclusion from major benchmarks is widely seen as a negative signal.
MSCI is reviewing whether companies with more than 50% of their assets in Bitcoin or other digital holdings should remain in traditional equity indices. The consultation runs until December 31, with a final decision expected on January 15, 2026. Strategy’s inclusion in indices like Nasdaq‑100 and MSCI USA has made it a proxy for Bitcoin exposure in passive funds.
Analysts caution that delisting could damage Strategy’s credibility, reduce liquidity, and complicate future capital raising. The company’s premium over its net asset value (mNAV) has eroded sharply, and its valuation is increasingly tied to Bitcoin’s price. J.P. Morgan warned that a negative MSCI ruling could effectively turn Strategy into a pure Bitcoin holding vehicle.
Despite structural risks, Strategy has ramped up Bitcoin purchases. On Monday, it acquired 8,178 BTC—its largest single‑day buy since July. This signals continued commitment to its crypto treasury strategy, even as regulatory and index scrutiny intensifies.
Strategy’s stock remains in a bearish trend, with RSI indicators below 40 and price action testing key support zones. If selling continues, the next downside target lies near its August low. On the upside, recovery would require a decisive break above recent resistance levels and stabilization of mNAV ratios.