The bitcoin-focused corporation Strategy, previously operating as MicroStrategy, is confronting one of the most significant challenges in its corporate history. A stark warning from JPMorgan threatens to undermine its entire business framework, while senior executives are simultaneously offloading company shares. Market participants are questioning whether this signals a terminal decline or merely represents exaggerated market panic.
Valuation Plummets Below Bitcoin Holdings
Investors have already taken defensive positions. For the first time since early 2024, Strategy’s stock is trading below the value of its bitcoin reserves. The key metric known as “mNAV” has dropped below 1.0, indicating that the market now values the entire company—including its approximately 649,870 bitcoin—at less than the digital assets themselves.
This represents a dramatic transformation for what was once considered a premium vehicle for institutional cryptocurrency exposure. The stock’s severe underperformance relative to bitcoin itself suggests investors are already pricing in worst-case scenarios.
January 15: The Decision Date
Market volatility is expected to remain elevated until MSCI’s January ruling. A negative decision could trigger substantial selling pressure from forced liquidations by index funds. Conversely, if Strategy maintains its index position, a sharp rebound could materialize as the current “exclusion discount” evaporates.
Should investors sell immediately? Or is it worth buying Strategy?
Insider Transactions Raise Questions
Recent SEC filings reveal that key executives are reducing their holdings during this period of uncertainty. Wei-Ming Shao, who serves as Executive Vice President and General Counsel, disposed of 5,200 shares on November 18 and 19. Although these sales occurred under a predetermined trading plan (Rule 10b5-1), the timing appears questionable given the ongoing index-related concerns.
Billions at Stake in Index Review
The most substantial threat emerges from global index provider policies. JPMorgan recently published analysis indicating that Strategy faces potential removal from major MSCI indices—including MSCI World and MSCI USA—on January 15, 2026. This stems from the index provider’s evaluation of whether to exclude companies whose digital assets constitute more than 50% of total assets.
Strategy significantly exceeds this threshold, and the bank projects severe consequences:
- $2.8 billion could immediately exit passive funds that track MSCI indices
- $8.8 billion might ultimately be withdrawn if competing index providers implement similar rules
- Selling pressure would occur through mechanical rebalancing processes, independent of the company’s operational performance
For a stock already experiencing downward momentum, such an event would deliver a devastating impact.
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