MicroStrategy, recently rebranded as Strategy Inc., is facing a significant challenge as leading index providers, including MSCI, contemplate new rules that could lead to the exclusion of the company from major equity indices. This potential change could impact nearly $9 billion in passive investment flows, putting substantial pressure on the firm and its innovative business strategy.
As of now, Strategy Inc. holds 649,870 Bitcoin, with an average purchase price of $74,430 per coin. The company’s break-even point aligns closely with this purchase price, leaving minimal room for error as Bitcoin’s market value continues to be under pressure. With a market capitalization of approximately $51 billion and an enterprise value of $66 billion, the stakes have never been higher.
MSCI’s formal consultation began in September 2025 regarding how to classify companies with significant digital asset holdings. The proposed rule could exclude any firm where digital assets constitute 50% or more of total assets and reflect the primary business focus. Critics argue that this categorizes such firms as investment funds rather than legitimate operating companies within equity indexes, thereby risking their classification.
The implications of exclusion go beyond MSCI. Strategy’s stock, trading under the ticker MSTR, is included in essential benchmarks like the Nasdaq 100 and various Russell indexes. An analysis from JPMorgan indicates that an MSCI exclusion alone could lead to passive fund outflows totaling about $2.8 billion. If other index providers follow suit, total potential outflows could soar to as much as $8.8 billion.
This scenario presents a formidable challenge to CEO Michael Saylor’s aggressive Bitcoin accumulation strategy. A decision on the proposed changes is expected by January 15, 2026, marking a pivotal moment for the company.
The timing of these developments adds to their significance. Strategy’s shares have plummeted by 60% from recent highs, leading to a rapid erosion of the valuation premium that has been crucial for its capital-raising strategy. The company’s multiple to net asset value (mNAV) has compressed toward parity, diminishing investor trust in Saylor’s strategy of “selling stock to buy Bitcoin,” a model that thrives when share prices exceed the value of Bitcoin holdings.
In addition, the rising costs of funding present further complications. Earlier in 2025, Strategy issued convertible notes under less favorable conditions, compounding the financial strain. While the firm reported a 15.81% profit from its Bitcoin holdings as of mid-November, this profit margin may narrow sharply if Bitcoin’s price approaches the break-even point.
The market remains divided over the proposed classification. Matthew Sigel, head of digital assets research at VanEck, has noted that JPMorgan’s report reflects client feedback rather than a definitive push for exclusion, suggesting that the discourse around index classification may be more procedural than fundamentally based.
This situation has broader implications, especially for other companies like MARA Holdings and Bitcoin Standard Treasury Company, which also hold significant digital assets. However, Strategy’s size and visibility make it a crucial test case on how public firms using Bitcoin as a reserve may be classified moving forward.
As the January 15, 2026, decision date approaches, Strategy Inc. must adeptly navigate its Bitcoin holdings, manage increased funding costs, and satisfy shareholder expectations. The outcome of this deliberation will serve as a litmus test for other Bitcoin treasury companies and their ability to maintain access to passive capital, underscoring the high stakes involved for Saylor’s operational model.
