Bitcoin News Today: Bitcoin's Plunge and Index Uncertainty Test Saylor's High-Stakes Bet

Michael Saylor's Strategy Falters, but His Bitcoin Bet Holds Strong

Michael Saylor's Strategy Inc., the former MicroStrategy, is navigating a turbulent market as its stock faces headwinds amid a broader crypto slump and looming index reclassification risks. Despite these challenges, the company remains committed to expanding its Bitcoin holdings, signaling confidence in its long-term treasury strategy according to reports. With Bitcoin trading near a seven-month low of $80,000, Strategy's stock has plummeted 69% from its record high, raising concerns about the firm's financial resilience.

The company's aggressive Bitcoin accumulation strategy, which includes over 649,870 BTC purchased at an average cost of $74,433, has drawn both praise and scrutiny. In a November 21 tweet, Strategy reiterated its 2022 playbook of buying Bitcoin during market downturns, even as JPMorgan warned of potential $2.8 billion in outflows if MSCI removes the stock from its indices according to analysis. The index provider is set to decide on January 15, 2026, whether companies holding more than half their assets in digital assets qualify for traditional equity indices according to reports. Analysts estimate total redemptions could reach $11.6 billion if other index providers follow suit.

CEO Michael Saylor has defended Strategy's business model, emphasizing it is a "publicly traded operating company with a $500 million software business" rather than a passive holding vehicle according to statements. He highlighted the firm's $7.7 billion in digital credit securities raised this year and framed Bitcoin as "productive capital" within a structured finance framework. However, the stock's market value has compressed to 1.05 times its net asset value, amplifying sensitivity to Bitcoin price swings. Every $1,000 move in BTC now impacts Strategy's portfolio by roughly $650 million.

Bitcoin's recent selloff has intensified pressure on Strategy's balance sheet. The asset has erased all year-to-date gains, trading 12% lower in 2025, while Ethereum has fallen nearly 19% according to reports. Saylor acknowledges the risks, stating the company could withstand an 80%–90% Bitcoin drawdown but insists annual gains of 1.25% would sustain dividends according to reports. Meanwhile, short sellers have increased exposure to both MSTR and Bitcoin futures, reflecting growing bearish sentiment.

The broader market's liquidity crisis has further complicated Strategy's outlook. ETF outflows and forced liquidations have drained $20 billion from crypto open interest since October, while institutional investors cut $5.38 billion in MSTR exposure in Q3 2025. Some analysts view the stock as a proxy hedge for Bitcoin, with Tom Lee of Bitmine Immersion noting its role in a market lacking robust crypto-native hedging tools. Yet, the divergence between AI-driven equity gains and crypto's underperformance has deepened, with blockchain's commercial applications still perceived as abstract according to market analysis.

As the MSCI decision looms, Strategy's fate remains intertwined with Bitcoin's volatility. Saylor's "indestructible" stance contrasts with warnings of a potential "death spiral" if the company's cost basis is breached. For now, the market watches closely, aware that MicroStrategy's trajectory often mirrors Bitcoin's broader fortunes.