Strategy’s stock is experiencing a severe downturn, having lost approximately 60% of its value from recent peaks. The company’s aggressive bets on Bitcoin are now exacting a heavy toll, prompting management to hastily erect a financial firewall. The critical question for investors is whether this new multi-billion dollar cushion will be sufficient to stem a total collapse in confidence, or if the most significant shock is yet to come.
A Defensive Pivot and a Liquidity Lifeline
The steep decline in the share price is directly linked to Strategy’s substantial exposure to cryptocurrency markets. While the firm holds a massive 650,000 Bitcoin, its former appetite for accumulation has vanished. Purchases plummeted from 134,000 coins in November 2024 to just 9,100 by November 2025, marking a decisive shift to a defensive posture.
To maintain liquidity amid the ongoing sell-off, the company has established a cash reserve of $1.44 billion. Management intends this capital buffer to act as a financial shock absorber. Its primary purposes are to secure interest payments, guarantee dividends, and—most crucially—avoid forced sales of its Bitcoin holdings should the bear market persist.
Should investors sell immediately? Or is it worth buying Strategy?
The Specter of Forced Selling and Index Exclusion
Despite this newly announced safety net, the situation remains precarious. Analysts at Bitwise estimate a startling 75% probability that Strategy will be removed from the MSCI World Index. An exclusion would trigger devastating consequences: index funds would be compelled to offload approximately $2.8 billion worth of shares, placing enormous additional downward pressure on the already battered stock price.
Beyond these balance sheet maneuvers, management is attempting to forge a new operational path through a partnership with HCLTech and its “Strategy Mosaic” AI platform. For shareholders, however, the immediate focus is singular: Will the $1.44 billion buffer hold, or does the threat of further capital dilution loom? The shares, currently trading around €160, continue to struggle against a powerful downward trend.
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