Original / Odaily Planet Daily (@OdailyChina)
As a "cryptocurrency barometer," the stock price of Strategy always stirs the market's nerves, closely linked to key factors such as cash flow stability and index status. Latest news shows that from December 15 to 21, Strategy raised $748 million by selling common stock, increasing its cash reserves to $2.19 billion, and has suspended Bitcoin purchases; the company currently holds Bitcoin worth approximately $60 billion.
The key question facing the cryptocurrency market alongside Strategy is: when will the stock price break free from its downward predicament? When should investors position themselves in MSTR stock? Odaily Planet Daily will briefly analyze this through the following three questions.
Question One: The Origin of Strategy's Downturn: The MSCI Index Exclusion Controversy
Looking back at the stock price decline of Strategy in the third and fourth quarters, aside from the systemic downturn caused by the "10.11 crash" and the shrinking buying power in the cryptocurrency market, the most direct trigger was the October news that "Strategy may be excluded from the MSCI index."
Current Status of Strategy: Unrealized Gains Exceed $10.1 Billion, Annual Return Approximately 24%
According to on-chain analyst Yu Jin's monitoring, as of December 22, Strategy (MSTR) still holds 671,268 BTC, valued at $60.441 billion, with an average purchase price of $74,972, resulting in an unrealized gain of $10.114 billion. In contrast, the leading ETH treasury company BitMine has an average ETH holding price of $3,884, resulting in an unrealized loss of $3.37 billion. In this regard, the resilience of BTC compared to ETH is still evident.
On December 15, Strategy's founder and executive chairman Michael Saylor stated that Strategy holds 671,268 Bitcoins, with an average purchase price of $74,972, and the year-to-date return on Bitcoin is 24.9%. From the data perspective, Strategy remains an outstanding blue-chip stock.
However, from the overall data of BTC treasury companies, limited by the -6% annual decline in BTC, a report from BitcoinTreasuries.net shows that by 2025, only one Bitcoin treasury company's stock performance has surpassed the benchmark S&P 500 index (with an annual return of 16%), namely The Blockchain Group, headquartered in France, whose stock price has surged about 164% since January 1. In comparison, Strategy's stock price has dropped 12%, Metaplanet's stock price has fallen nearly a third, and Nakamoto, which raised over $600 million to purchase Bitcoin, has seen its market value plummet by over 98%.
MSCI Index Exclusion Controversy: Proposal to Ban Digital Asset Holdings Exceeding 50%
In October this year, in response to client inquiries, MSCI proposed to exclude companies with digital asset holdings exceeding 50% of total assets from its global benchmark index. MSCI believes that such companies are more like investment funds, which are not included in its index system. However,
This move quickly drew criticism and rebuttal from related companies: Strategy warned that this would lead to severe index volatility and contradict the U.S. government's policy of promoting digital asset innovation; additionally, Strategy strongly urged the MSCI stock index committee to abandon the proposal; many related companies stated that they are engaged in actual operations and developing innovative products, and that the proposal unfairly discriminates against the cryptocurrency industry.
The two sides engaged in a heated debate: MSCI argued that digital asset treasury (DAT) companies like Strategy and BitMine are more like investment funds rather than traditional operating businesses; Strategy pointed out that due to IFRS reporting, companies can value Bitcoin at cost, while U.S. GAAP requires quarterly fair value marking, making the rule difficult to apply consistently. If Bitcoin prices fluctuate or accounting standards differ, companies holding Bitcoin assets will "dramatically enter and exit" major indices, causing confusion for index providers and investors.
The market reacted with mixed responses and significant divergence.
Potential Impact of Strategy's Exclusion from the MSCI Index: Up to $15 Billion in Cryptocurrency Sell-off
Following the MSCI index exclusion controversy, various institutional analysts have provided their views:
- JPMorgan analysts estimate that if Strategy is removed from the MSCI index, passive funds tracking the index may be forced to sell up to $2.8 billion worth of Strategy stock, leading to approximately $2.8 billion in passive fund outflows.
- If MSCI proceeds with its plan to exclude cryptocurrency treasury companies from its index, related companies may be forced to sell up to $15 billion in cryptocurrencies. The group opposing MSCI's proposal, "BitcoinForCorporations," predicts that these companies, based on a "verified preliminary list" of 39 companies with a total adjusted market capitalization of $113 billion, will face outflows of $10 billion to $15 billion; Strategy accounts for 74.5% of the affected total adjusted market capitalization.
- Some analysts indicate that this move could result in a maximum loss of about $9 billion in stock demand for this Bitcoin-hoarding company and weaken the attractiveness of the entire sector.
- In December, Strategy successfully passed the Nasdaq 100 index adjustment, marking the first successful test since it joined the index last December.
- Analysts from Wall Street investment banks Jefferies and TD Cowen noted that if Strategy is ultimately excluded by MSCI, other indices in the global financial market may follow suit, primarily including: the Nasdaq 100 index, CRSP U.S. Total Market Index, and the FTSE Russell index under the London Stock Exchange Group.
- As of December 20, the Nasdaq 100 index has retained Strategy, CRSP declined to comment on whether it is considering excluding Strategy, while a spokesperson for the London Stock Exchange Group stated that they will continue to monitor the situation](https://www.odaily.news/zh-CN/newsflash/461516), but related consultation responses will follow their internal management processes.
- Strategy's executive chairman Michael Saylor and CEO Phong Le have written to MSCI, arguing that the company is an operating entity rather than a passive investment tool.
Currently, MSCI is conducting a public consultation and will announce its final decision on January 15 next year.
Question Two: The Lindy Effect Verification in the DAT Field: Can Strategy Be "Too Big to Fail"?
The Lindy effect suggests that the longer something has existed, the greater the likelihood it will continue to exist in the future.
For example, classic works such as the "Bible" and "Analects" are more likely to be passed down than current bestsellers or viral autobiographies.
Previously, Strategy's founder Michael Saylor boldly stated, "If MicroStrategy can accumulate 5% of the total Bitcoin supply, the price of Bitcoin will reach $1 million. He further stated that if the holding ratio reaches 7%, each Bitcoin will be worth $10 million." He described this behavior as providing upward momentum for the network.
Previously, BitMine chairman Tom Lee analyzed and affirmed the significance of "Strategy establishing a $1.4 billion cash reserve," stating, "Although Strategy's stock price has fallen over 50% in the past six months, this cash reserve will allow the company to continue paying dividends to shareholders during periods of Bitcoin price decline without having to sell its $61 billion Bitcoin holdings." He also pointed out that during the last Bitcoin downturn, Strategy's stock trading price fell below its net asset value (NAV), and establishing a cash reserve was a preparation for such situations.
According to TD Cowen analyst Lance Vitanza, Strategy needs to pay approximately $824 million in interest and dividends each year.
Considering the news that Strategy's cash reserves have increased to $2.19 billion, the company's "cash flow crisis" can at least be delayed until the second half of 2027.
Question Three: Is There Still Buying Interest in Strategy Stock? Billionaire-Backed Funds and National-Level Funds Are Still Buying
Aside from the shareholder information mentioned in our previous article “Stock Price Halved but Long-Term Capital Bets, Revealing the 'Mysterious Shareholder Group' of Strategy”, there has still been good buying interest in Strategy stock in the recent market. The latest news today shows that the daily trading volume of Strategy (MSTR) has surpassed that of banking giant JPMorgan. Additionally, other buyers are also large asset management funds:
Billionaire-Backed Hedge Fund Acquires Over 390,000 Shares of MSTR, Valued at $65 Million
On December 17, billionaire Steve Cohen's hedge fund Point72 Asset Management acquired 390,666 shares (approximately $65 million) of the Bitcoin treasury company Strategy (MSTR).
South Korea's National Pension Service: Strategy Stock Holdings Increased to $93 Million
On December 10, BitcoinTreasuries.NET reported that South Korea's National Pension Service (NPS), with assets totaling $1 trillion, has increased its holdings in the publicly traded company Strategy (MSTR) to $93 million.
Conclusion: January 15 May Be the Final Moment for Acquiring MSTR Stock
Previously, despite Citigroup significantly lowering the stock target price for Bitcoin treasury company Strategy from $485 to $325 in a report, it still maintained its "buy" rating, indicating the long-term confidence of capital institutions in MSTR. On January 15 of next year, whether the MSCI index will continue to retain Strategy as a stock may become the final determining moment for acquiring MSTR stock.
Before that, the choice to bottom out or wait for the right opportunity depends on the individual investor's risk preference.
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