Strategy \u2014 the original \u201cbitcoin-on-NASDAQ\u201d proxy \u2014 is now facing its most consequential structural risk since Michael Saylor began converting the firm into a leveraged BTC holding vehicle five years ago.<\/p>\n
A new JPMorgan research note warns<\/a> that Strategy is \u201cat risk of exclusion from major equity indices\u201d as MSCI approaches a key January 15 decision on whether companies with large digital-asset treasuries belong in traditional stock benchmarks.<\/p>\n MSCI is weighing a rule that would remove companies whose digital-asset holdings exceed 50% of total assets \u2014 a category in which Strategy sits at the extreme.\u00a0<\/p>\n With the company\u2019s market cap hovering<\/a> around $59 billion and nearly $9 billion held in passive index-tracking vehicles, analysts say any exclusion could unleash severe mechanical selling pressure.<\/p>\n Outflows could amount<\/a> to $2.8 billion if MSCI removes Strategy \u2014 and as much as $8.8 billion if other index providers follow, the analysts noted.<\/p>\n The warning lands at a vulnerable moment. Strategy shares have fallen more than bitcoin itself in recent months as the company\u2019s once-lofty premium \u2014 the \u201cmNAV\u201d spread between enterprise value and bitcoin holdings \u2014 has collapsed to just above 1.1, the lowest since the pandemic.<\/p>\n MSTR has lost roughly 40% in value over the last six months, with 11% coming in the last five trading days.\u00a0<\/p>\n The model that powered Strategy\u2019s rise \u2014 raise equity, buy bitcoin<\/a>, benefit from reflexivity, repeat \u2014 now faces structural headwinds: The stock is down over 60% since last November\u2019s high.<\/p>\n Its perpetual preferred shares have sold off sharply<\/a>, with yields on its 10.5% notes rising to 11.5%. A recent euro-denominated preferred issuance broke below its discounted offer price within two weeks.<\/p>\n Strategy\u2019s inclusion in the Nasdaq 100, MSCI USA, MSCI World, and other benchmarks has quietly funneled the bitcoin trade into mainstream portfolios for years.\u00a0Passive ETF and mutual-fund flows helped sustain Strategy\u2019s liquidity, valuation, and visibility with institutional allocators.<\/p>\n But MSCI\u2019s October consultation revealed something new according to JPMorgan: Market participants increasingly view digital-asset treasury companies as closer to investment funds than operating businesses. Investment funds are not eligible for index inclusion \u2014 and that\u2019s the heart of Strategy\u2019s problem.<\/p>\n MSCI said it does not \u201cspeculate on future index changes,\u201d but is evaluating whether digital-asset-heavy balance sheets should remain inside equity benchmarks.<\/p>\n Active managers aren\u2019t required to mimic index changes, but JPMorgan warns that removal alone could spark reputational damage, widen funding spreads, and thin trading activity \u2014 making the stock less attractive to large institutions.<\/p>\n Strategy\u2019s rise \u2014 and its current risk \u2014 underscores how deeply bitcoin has seeped into global finance through indirect channels.\u00a0<\/p>\n At one point, analysts speculated the company might gain entry into the S&P 500. Instead, the digital-asset treasury model now looks increasingly fragile because Bitcoin is down 30% from its October high and crypto markets have shed over $1 trillion in value.<\/p>\n JPMorgan believes Strategy\u2019s dramatic underperformance relative to BTC is now primarily driven by index-exclusion fears, not bitcoin weakness<\/a>. If MSCI rules negatively, the company\u2019s valuation could become almost fully tethered to its underlying BTC \u2014 with its mNAV ratio drifting closer to 1.0.<\/p>\n That would eliminate the reflexive premium that powered the last half-decade of Saylor\u2019s strategy.<\/p>\nThe current state of MSTR<\/h2>\n
Strategy\u2019s January 15 inflection point<\/h2>\n
![\"Strategy\"](\"https:\/\/cdn-ileamcn.nitrocdn.com\/BngESKHdyFjXuZbvyAhEMmtQtwLKSKkU\/assets\/images\/optimized\/rev-c3df002\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/11\/Bitcoin-Price-Trades-Near-93000-as-Strategy-MSTR-Adds-8178-BTC-in-Largest-Purchase-Since-July-1024x576.jpg\" "\\"JPMorgan")
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