Bitcoin News Today: MSCI's Bitcoin Classification Dilemma Threatens MSTR's $59B Valuation

Michael Saylor's Strategy Inc. (MSTR) faces mounting pressure as major index providers consider excluding the company from key benchmarks, a move that could trigger billions in outflows and destabilize its leveraged Bitcoin-driven business model. JPMorgan analysts warned in a note this week that if MSCI proceeds with its proposed exclusion of companies with over 50% of assets in digital assets, Strategy could lose $2.8 billion in passive fund flows from the MSCI USA and Nasdaq 100 indices alone, with additional risks if other providers follow suit. The decision, expected by January 15, 2026, comes as the firm's stock has plummeted over 60% from its November 2024 peak, eroding the premium that once made it a favorite among crypto-aligned investors.

The proposed exclusion stems from a fundamental debate over whether companies like Strategy, which hold Bitcoin as their primary asset, should be classified as operating businesses or investment vehicles. MSCI's October consultation highlighted concerns that digital asset treasuries resemble closed-end funds, which are typically excluded from equity indices. Strategy's market value of $59 billion now rests on a narrow margin: its multiple of net asset value (mNAV) has collapsed to just 1.1, the lowest since the pandemic, as Bitcoin's price has fallen over 30% from its October high.

Despite the market turmoil, Saylor continues to aggressively expand the firm's Bitcoin holdings. In November alone, Strategy acquired $1.5 billion in Bitcoin, bringing its total stash to 640,808 BTC as of November 17 according to reports. The company funds these purchases through equity and convertible debt offerings, which have diluted its share count from 160 million to 286 million over the past year. This dilution, coupled with the stock's decline, has strained investor confidence, with yields on its 10.5% securities climbing to 11.5% and euro-denominated preferred shares trading below their discounted offer price.

The risks extend beyond index flows. Bloomberg analysts noted that exclusion could trigger a self-fulfilling prophecy: reduced liquidity, wider funding spreads, and reputational damage that further erode the stock's appeal to institutional investors. Strategy's inclusion in major indices has historically funneled billions into its shares, but the model now appears fragile as Bitcoin's rally stalls and crypto markets lose over $1 trillion in value year-to-date according to data.

Saylor, however, remains bullish. In a recent interview, he outlined an ambitious vision to build a $1 trillion Bitcoin balance sheet, leveraging long-term appreciation to create over-collateralized credit products and reshape global finance. Yet, with the firm's mNAV approaching parity and no hedging strategies in place, the company's survival hinges on Bitcoin's ability to rebound-a scenario complicated by its current technical and regulatory headwinds.

As the January deadline approaches, Strategy's fate underscores the precarious role of index inclusion in modern markets. What once amplified Saylor's narrative now threatens to unravel it, exposing the fragility of a model built on reflexivity rather than traditional revenue streams.