Strategy (MSTR) Stock: Company May Sell Bitcoin as Market Cap Nears Critical Threshold

TLDR

• Strategy (MSTR) faces possible removal from MSCI index by January 15, which could trigger up to $8.8 billion in outflows from passive investment funds
• CEO Phong Le revealed the company might sell bitcoin if its market cap falls below the value of its bitcoin holdings, breaking five years of never selling
• The stock has dropped 37-60% from its peak as bitcoin fell from $120,000 to as low as $82,000 before recovering to $93,000
• Strategy’s mNAV ratio currently sits at 1.01, dangerously close to the threshold that could trigger bitcoin sales
• The company owns 650,000 BTC worth roughly $59 billion and just lowered its year-end bitcoin price guidance to $85,000-$110,000 from $150,000

Strategy is in talks with MSCI about a potential removal from major equity benchmarks. A decision is expected by January 15.

MicroStrategy Incorporated, MSTR

The stakes are high. JPMorgan analysts estimate the move could trigger outflows of up to $8.8 billion if other index providers follow MSCI’s lead.

Strategy’s inclusion in indices like MSCI USA and MSCI World makes it a component of many passive investment products. Removal would force these funds to sell their holdings.

The news comes as Strategy faces mounting pressure. The stock has fallen 37% this year.

Bitcoin’s recent volatility hasn’t helped. The cryptocurrency dropped from an all-time high above $120,000 to as low as $82,000.

While bitcoin has since recovered to $93,000, it remains about 26% below its peak. Critics argue Strategy’s debt and equity issuance programs to accumulate bitcoin aren’t sustainable.

Breaking Five Years of Never Selling

The company dropped a bombshell last week. CEO Phong Le said Strategy would sell bitcoin under certain conditions.

This marks a dramatic shift. Strategy hasn’t sold a single bitcoin since establishing its treasury in August 2020.

Le outlined two scenarios that could trigger sales. The first involves the company’s market cap falling below the net asset value of its bitcoin holdings.

That threshold is dangerously close. Strategy’s mNAV currently sits at 1.01 according to blockchain analytics firm Artemis.

The company’s market cap has tumbled 60% since hitting a record high in July. It now hovers near the value of its bitcoin holdings despite recent bounces.

Updated Guidance Reflects New Reality

Strategy announced Monday it bought 130 more bitcoin. The purchase brings its total holdings to 650,000 BTC.

That stockpile is worth roughly $59 billion at current prices. The company has become the largest public holder of bitcoin.

Strategy also set aside $1.44 billion to pay dividends on its preferred stock and interest on outstanding debt. The move shows the company is managing its obligations carefully.

The company updated its 2025 earnings guidance. It now assumes bitcoin will trade between $85,000 and $110,000 at year-end.

That’s down from previous guidance around $150,000. The revision reflects the new market reality as bitcoin trades at $93,000.

Strategy stock and bitcoin prices could see renewed pressure heading into the MSCI decision deadline.

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