MicroStrategy Bitcoin Bet Under Threat as JPMorgan Flags Major Index Risk
Microstrategy Bitcoin: MicroStrategy, now operating as Strategy, is confronting its most serious structural risk in years. JPMorgan analysts have issued a stark warning. Strategy may be removed from key equity indices including MSCI USA and potentially others posing a threat of billions in passive capital outflows.
What’s Driving the Risk
• Index Exclusion Fears: MSCI is reportedly reviewing whether companies with more than 50% of their assets in digital currencies should remain in its benchmarks.
• Potential Outflows: JPMorgan estimates $2.8 billion in outflows if Strategy is dropped from MSCI alone but that could swell to $8.8 billion if other index providers follow.
• Valuation Pressure: Strategy’s “mNAV” a ratio comparing its enterprise value to its Bitcoin holdings per share has tumbled to nearly 1x, meaning the market now values it almost purely as a Bitcoin treasury play.
Why This Matters
MicroStrategy’s entire business model hinges on owning Bitcoin. It holds 649,870 BTC, bought at an average price of $74,433 per coin. That’s hundreds of billions in leverage tied to the price of Bitcoin. If those index-tracking funds begin to exit, Strategy could face intense selling pressure both from forced redemptions and frozen liquidity.
Broader Market Implications
• Liquidity Hit: Without index inclusion, trading volumes may dry up, making it harder for Strategy to raise money through equity or debt.
• Model Scrutiny: This case raises broader questions about whether companies should convert themselves into “Bitcoin treasuries.” JPMorgan argues that Strategy now looks more like a leveraged crypto fund than a traditional software business.
• Ripple Effects: A delisting precedent could affect other crypto-treasury firms JPMorgan’s note mentions Marathon Digital (MARA), Riot Platforms (RIOT), and more.
What to Watch Next
• Index Decision Deadline: MSCI’s final decision is expected by January 15, 2026.
• Bitcoin Price Movement: If Bitcoin drops significantly below Strategy’s average purchase price, the company could face margin pressure or even be forced to liquidate.
• Capital Flows: Watch for ETF and mutual fund outflows from Strategy, especially in passive vehicles tied to major indices.
• Debt Strategy: How Strategy manages its debt load (including preferred stock) will be critical if liquidity tightens.
MicroStrategy’s bold bet on Bitcoin may be coming to a crossroad. What began as a pioneering corporate treasury strategy could unravel if index providers redefine what counts as an “operating company.” A potential exclusion from MSCI and other major indexes would test the sustainability of its Bitcoin-first model and could force a reckoning for similarly structured companies in the crypto world.
