Strategy — the original “bitcoin-on-NASDAQ” proxy — is now facing its most consequential structural risk since Michael Saylor began converting the firm into a leveraged BTC holding vehicle five years ago.
A new JPMorgan research note warns that Strategy is “at risk of exclusion from major equity indices” as MSCI approaches a key January 15 decision on whether companies with large digital-asset treasuries belong in traditional stock benchmarks.
MSCI is weighing a rule that would remove companies whose digital-asset holdings exceed 50% of total assets — a category in which Strategy sits at the extreme.
With the company’s market cap hovering around $59 billion and nearly $9 billion held in passive index-tracking vehicles, analysts say any exclusion could unleash severe mechanical selling pressure.
Outflows could amount to $2.8 billion if MSCI removes Strategy — and as much as $8.8 billion if other index providers follow, the analysts noted.
The current state of MSTR
The warning lands at a vulnerable moment. Strategy shares have fallen more than bitcoin itself in recent months as the company’s once-lofty premium — the “mNAV” spread between enterprise value and bitcoin holdings — has collapsed to just above 1.1, the lowest since the pandemic.
MSTR has lost roughly 40% in value over the last six months, with 11% coming in the last five trading days.
The model that powered Strategy’s rise — raise equity, buy bitcoin, benefit from reflexivity, repeat — now faces structural headwinds: The stock is down over 60% since last November’s high.
Its perpetual preferred shares have sold off sharply, 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.
Strategy’s inclusion in the Nasdaq 100, MSCI USA, MSCI World, and other benchmarks has quietly funneled the bitcoin trade into mainstream portfolios for years. Passive ETF and mutual-fund flows helped sustain Strategy’s liquidity, valuation, and visibility with institutional allocators.
But MSCI’s 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 — and that’s the heart of Strategy’s problem.
MSCI said it does not “speculate on future index changes,” but is evaluating whether digital-asset-heavy balance sheets should remain inside equity benchmarks.
Active managers aren’t required to mimic index changes, but JPMorgan warns that removal alone could spark reputational damage, widen funding spreads, and thin trading activity — making the stock less attractive to large institutions.
Strategy’s rise — and its current risk — underscores how deeply bitcoin has seeped into global finance through indirect channels.
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.
Strategy’s January 15 inflection point
JPMorgan believes Strategy’s dramatic underperformance relative to BTC is now primarily driven by index-exclusion fears, not bitcoin weakness. If MSCI rules negatively, the company’s valuation could become almost fully tethered to its underlying BTC — with its mNAV ratio drifting closer to 1.0.
That would eliminate the reflexive premium that powered the last half-decade of Saylor’s strategy.
Earlier this year in an interview with Bitcoin Magazine earlier this year, Saylor outlined an ambitious vision to build a trillion-dollar Bitcoin balance sheet, using it as a foundation to reshape global finance.
He envisions accumulating $1 trillion in Bitcoin and growing it 20–30% annually, leveraging long-term appreciation to create a massive store of digital collateral.
From this base, Saylor plans to issue Bitcoin-backed credit at yields significantly higher than traditional fiat systems, potentially 2–4% above corporate or sovereign debt, offering safer, over-collateralized alternatives.
He anticipates this could revitalize credit markets, equity indexes, and corporate balance sheets while creating new financial products, including higher-yield savings accounts, money market funds, and insurance services denominated in Bitcoin.
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