- Strategy holds 649,870 Bitcoins valued at over $56 billion, with its market capitalization currently at $49.5 billion.
- JPMorgan analysts warn the company could face billions in forced selling if index provider MSCI removes digital asset treasury firms from key indexes.
- Strategy stock has dropped over 36% in November but rebounded slightly as crypto markets recovered on rate cut hopes.
- Michael Saylor has reaffirmed his support for the company’s Bitcoin holding strategy, despite the volatility in crypto and equities.
- Retail investor sentiment has shifted to bullish after a period of underperformance when compared to Bitcoin itself.
Strategy, the largest publicly traded holder of Bitcoin, currently owns 649,870 Bitcoins worth over $56 billion. The company’s market capitalization has fallen to $49.5 billion, leading shares to trade below the value of its Bitcoin holdings. In November, Strategy stock declined more than 36%, marking its worst monthly drop since April of the previous year.
JPMorgan analysts cautioned that the stock could face significant risk if index publisher MSCI chooses to remove digital asset treasury companies — companies that hold digital assets like Bitcoin as part of their corporate treasury — from its key indexes. According to these analysts, removal from indexes such as MSCI USA and MSCI World could result in about $2.8 billion in forced selling as funds tracking these indexes would be required to reduce exposure to Strategy. If other index providers like Russell follow, outflows could reach as much as $8.8 billion.
The company’s challenges are further compounded by the recent drop in Bitcoin prices, which have fallen over 24% for the month after hitting an all-time high above $126,000. This correction followed heavy profit-taking, a large liquidation event in October, and ongoing concerns about interest rate policy from the Federal Reserve.
Michael Saylor, who chairs Strategy and was instrumental in adopting Bitcoin as a treasury reserve asset in 2020, has reaffirmed his commitment to this strategy. On social media, he stated that he “won’t back down,” describing the recent volatility as “Satoshi’s gift to the faithful.” Last week, the company did not purchase any additional Bitcoin, ending a six-week streak of continuous buying. Saylor indicated this pause was “probably nothing,” highlighting that BTC-backed loan volumes through the company’s digital structured products hit an all-time high of $18.9 million for the week ending November 21, as reported.
Retail sentiment on Stocktwits, an investor social platform, is now mainly bullish toward Strategy shares. Some traders expect a sharp rebound if short-sellers cover their positions, while others speculate that political developments—such as potential support from former President Donald Trump—could influence the company, given current efforts by Republican legislators to advance crypto regulation bills.
Year-to-date, Strategy shares have fallen over 42%, a sharper drop compared to Bitcoin’s 6.3% decline in the same period.
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