Strategy Shares Face Mounting Pressure as Decline Intensifies

Strategy US5949724083

The equity of Strategy, the Bitcoin treasury firm formerly known as MicroStrategy, is experiencing a sharp and accelerating sell-off. On Wednesday alone, the stock plummeted more than 7%, extending a severe downtrend that has erased approximately 41% of its value since the start of the year. Investor confidence is deteriorating, with even a recent billion-dollar Bitcoin acquisition failing to stem the tide.

The scale of the current loss of faith is starkly visible in the numbers. The share price now trades more than 60% below its 52-week high of $457.22. A key valuation metric, the premium to its adjusted net asset value (mNAV), has collapsed to a range of approximately 1.10 to 1.14. This indicates the stock is barely trading above the underlying value of the Bitcoin it holds.

Furthermore, a critical measure has turned negative for the first time in years: existing shareholders now own less Bitcoin per share than they did previously. This dilution is a direct result of capital raises used to fund further cryptocurrency purchases, placing the company’s core business model under significant strain.

A Billion-Dollar Purchase Amid Market Weakness

Earlier this week, the company disclosed it had purchased 10,645 Bitcoin for nearly $1 billion, at an average price of $92,098 per coin. This brings Strategy’s total holdings to 671,268 Bitcoin, worth an estimated $58.5 billion.

However, the timing of this substantial buy has proven problematic. Shortly after the announcement, Bitcoin’s price slid toward the $85,000 mark, meaning the latest acquisition is already underwater. While the firm’s aggregate position was built at a lower average cost of $74,972 per Bitcoin (with a total cost basis of $50.33 billion), the market is no longer rewarding its aggressive accumulation strategy.

Threat of Index Exclusion Looms Large

Adding to the company’s challenges is a potential threat from index providers. Although Strategy successfully maintained its position in the Nasdaq 100 during the annual review, a separate risk has emerged. MSCI is considering excluding companies with more than 50% of their assets in digital currencies from its Global Investable Market Indexes. A final decision on this proposal is expected by January 15, 2026.

Analysts at JPMorgan have quantified the potential impact. They estimate that an MSCI exclusion alone could trigger outflows of $2.8 billion from passive funds tied to the index. Should other major index providers follow suit, the total selling pressure could escalate to $8.8 billion.

Management Pushes Back Against Proposed Rules

In response to the MSCI consultation, Executive Chairman Michael Saylor and CEO Phong Le submitted a twelve-page letter of protest to the committee. Their central arguments contend that Strategy is an operating business, not an investment fund. They label the proposed 50% threshold as arbitrary and discriminatory, further asserting that the rule change would contradict the pro-cryptocurrency stance of the current U.S. administration.