Michael Saylor Says Bitcoin Makes MSTR 'Interesting,' But Polymarket Aren't So Sure

Strategy Inc (MSTR) Faces Substantial Loss Due to Bitcoin Decline

Strategy Inc (MSTR) faces a significant unrealized loss as Bitcoin's value fell by 25% to $88.7K, reducing the value of its Bitcoin holdings to $59.7 billion from $73.2 billion. The company's stock price dropped 53% in the quarter, outpacing Bitcoin's decline. This decline has raised concerns about Strategy's financial health and its ability to maintain its leverage model according to analysts.

Index provider MSCI is expected to decide by January 15 whether to remove Strategy from its index due to its digital asset concentration. Analysts warn that a removal could affect investor demand and ripple through similar 'digital asset treasury' firms according to market reports. The decision is a key test of how the market classifies Strategy—either as an operating software company or as a Bitcoin investment vehicle according to industry analysts.

Options activity on MSTR has surged, with open interest now at 86.2% of the company's market capitalization. This level of activity far exceeds ratios seen at major technology firms like Tesla and Meta. Analysts note that despite this high activity, MSTR's stock has underperformed its peers over the past year.

Why the Move Happened

The decline in Bitcoin prices has directly affected Strategy's asset value. As one of the largest corporate holders of Bitcoin, its financial performance is closely tied to the cryptocurrency's value according to financial reports. A 25% drop in Bitcoin's price has led to a significant reduction in the value of Strategy's holdings, impacting its overall balance sheet.

Market analysts point to several factors contributing to the stock's underperformance. These include Bitcoin's muted price action in 2025, aggressive share dilution, and potential index removal risks according to market research. The company's focus on accumulating Bitcoin through equity issuance has raised concerns about its debt load and liquidity according to financial analysis.

How Markets Responded

Strategy's stock price has been volatile, dropping nearly 50% in 2025. This decline reflects a shift in market sentiment, with investors becoming more cautious about paying a premium for Bitcoin-treasury companies. The stock now trades at a 20-25% discount to the value of its Bitcoin holdings, according to analyst Ted Pillows.

The company's options market activity has also increased, with a large January 2 options expiry expected to heighten short-term volatility according to market data. This activity suggests that investors are preparing for potential price swings as the market evaluates the impact of Bitcoin's performance and index decisions according to options traders.

What Analysts Are Watching

Analysts are closely monitoring the January 15 MSCI decision, as well as Strategy's future disclosures on share issuance and Bitcoin purchases according to investment research. These factors could influence the company's ability to maintain its leverage model and continue accumulating Bitcoin according to market forecasts.

Additionally, analysts are watching how Bitcoin stabilizes in 2026 after a volatile year. If Bitcoin remains within a $80,000 to $90,000 range, the mechanics of Strategy's at-the-market offering may face challenges according to market analysis. Conversely, if Bitcoin rises toward $110,000, the asset gap between the company's holdings and equity value may widen, potentially forcing a repricing according to cryptocurrency analysts.

The company has also introduced a preferred stock yield that adjusts based on market conditions. This mechanism is designed to support the preferred stock's price while continuing to fund Bitcoin accumulation according to market commentary. Analysts note that this adjustment could provide additional flexibility in managing the company's balance sheet and equity dilution according to financial experts.

The market remains divided on Strategy's future. While some investors see potential for leverage gains if Bitcoin rises, others view the stock as a high-risk, high-volatility derivative with significant dilution concerns according to market analysis. The outcome of the MSCI decision and Bitcoin's price action will likely shape the company's trajectory in the coming months according to industry forecasts.