Michael Saylor’s Strategy Inc. is now confronting the sharpest reversal of confidence since it pivoted into a Bitcoin-anchored identity in 2020. The company, once hailed as the flagship “digital asset treasury” play, is facing a very real threat: removal from the major benchmark indices that helped cement its place in mainstream portfolios.
According to a new Reuters-cited note from JPMorgan, Strategy could soon be expelled from the MSCI USA Index and even potentially the Nasdaq 100. MSCI’s consultation proposes excluding companies whose digital-asset holdings make up 50% or more of their assets, a threshold Strategy clears by a wide margin.
If MSCI moves forward, as much as $2.8 billion could be forced out of the stock from passive funds. If other providers follow, total outflows could approach $9 billion. A final decision is expected by January 15.
The risk cuts deeper than liquidity. Index inclusion has long served as an invisible engine for Strategy: it attracted institutional allocators, lowered funding costs, and reinforced the notion that Bitcoin-treasury companies could coexist inside traditional equity frameworks. Losing that status would strike at the legitimacy that once powered Strategy’s premium.
That premium is already gone. After soaring to record highs last November, Strategy’s shares have dropped more than 60%, dragging its market value down to barely above the worth of its Bitcoin holdings. The firm’s mNAV, the ratio of enterprise value to BTC, has collapsed to about 1.1, reflecting how dramatically investor enthusiasm has faded. Bitcoin’s own 30% slide from its October peak has accelerated the unwind, erasing over $1 trillion in crypto market value.
Funding markets are flashing red as well. Strategy’s preferred shares have slumped, with yields on its 10.5% notes jumping to 11.5%, and its euro-denominated preferred offering falling below its discounted issue price in under two weeks.
What once operated as a flywheel, raise equity, buy Bitcoin, watch the premium expand, now looks increasingly fragile. Even JPMorgan warns that index exclusion would be viewed negatively across the market, further tightening liquidity and raising capital-raising costs.
Strategy still holds nearly 650,000 BTC, but the belief that once fueled its ascent is evaporating. The model that defined the digital-asset treasury era is being tested, and the outcome now rests with both the market and the index gatekeepers.
