Bitcoin News Today: MicroStrategy's Stock Plummets 40% as Index Exclusion Fears Outweigh Bitcoin's Slide

Bitcoin treasury firm MicroStrategy (MSTR) faces a potential $11.6 billion outflow in share value if major index providers like MSCI remove it from equity benchmarks, according to JPMorgan analysts. The bank highlighted that the recent steep decline in MSTR's stock price-down over 40% in the past month-has been driven more by fears of index exclusion than Bitcoin's price drop, which has fallen 22% year-to-date.

MSCI is currently consulting on a proposal to exclude companies whose primary business involves holding Bitcoin or other cryptocurrencies, where such assets constitute at least 50% of total holdings. The index provider announced in October that it would evaluate this policy shift, with a decision due by January 15, 2026. If MSCI acts, it could trigger $2.8 billion in outflows from MSTR alone, with the total rising to $11.6 billion if other indices like the Nasdaq-100 and Russell 1000 follow suit.

MicroStrategy, now rebranded as Strategy, holds a $56 billion Bitcoin stockpile, yet its market capitalization of $51 billion reflects a shrinking premium-down from 2.7 to 0.90-relative to its net asset value (mNAV) according to market analysis. This premium, which once reflected speculative fervor, has eroded as Bitcoin's price fell and liquidity concerns grew. JPMorgan warned that exclusion from major indices would damage the firm's reputation, complicate future capital raises, and reduce trading volumes, making it less attractive to institutional investors.

The firm's exposure to Bitcoin has indirectly expanded crypto access for both retail and institutional investors via index-linked funds. Over $9 billion of Strategy's $50 billion market cap is held in passive vehicles tracking indices like the MSCI USA and Nasdaq-100. Analysts argue this embedded presence has allowed Bitcoin exposure to seep into broader portfolios-a dynamic that could reverse if indices reclassify the firm.

Market sentiment has turned bearish, with prediction markets forecasting only a 20% chance of Bitcoin reaching $115,000 in the near term, versus a 80% probability of falling to $85,000. This shift reflects broader macroeconomic anxieties, including waning hopes for interest rate cuts and weaker-than-expected jobs data.

MicroStrategy's executive chair, Michael Saylor, has denied rumors of selling Bitcoin holdings, though the firm's accumulation pace has slowed. JPMorgan noted that a negative MSCI ruling would push Strategy's valuation closer to its Bitcoin net asset value, effectively treating it as a "holding vehicle" rather than a growth stock. The outcome of the January 15 decision will be pivotal for the company's market position and Bitcoin's indirect integration into traditional finance.