Strategic Shift: Company Halts Bitcoin Purchases to Amass Cash Reserve

In a notable departure from its previous approach, Strategy has suspended its aggressive accumulation of cryptocurrency. The firm is now prioritizing liquidity, having built a cash position exceeding $2 billion. This strategic pivot coincides with a significant reduction in Citibank’s price target for the company’s shares and the looming threat of an index exclusion that could trigger billions in forced selling.

Liquidity Takes Precedence Over Digital Assets

Between December 15 and 21, Strategy generated net proceeds of $747.8 million through the sale of 4.5 million shares. Notably, none of this capital was deployed to purchase Bitcoin. Instead, the entire sum was added to the corporate treasury, boosting cash reserves from $1.44 billion to $2.19 billion.

This marks a clear shift in tactical direction. Earlier in December, the company had acquired 10,645 Bitcoins. Its total holdings have since remained static at 671,268 BTC, with an average purchase price of $74,972 per coin. Although Strategy sits on substantial unrealized gains with Bitcoin trading below $90,000, management has adopted a defensive posture. The stated purpose of the enhanced liquidity is to service debt and fund dividends on preferred stock, providing a financial runway for the next 12 to 24 months.

Analyst Downgrade and Index Exclusion Risk

Adding to the company’s challenges, Citibank analyst Peter Christiansen slashed his price target for Strategy from $485 to $325 on December 22, though he maintained a “Buy” rating. The shares closed Monday at $164.32, trading more than 60% below their 52-week high of $455.90.

Should investors sell immediately? Or is it worth buying Strategy?

Further potential pressure stems from index provider MSCI, which is reviewing whether companies with substantial cryptocurrency holdings should be excluded from major indices. Analysts at JPMorgan estimate that a removal of Strategy could prompt passive fund outflows of approximately $8.8 billion. A final decision on this matter is anticipated by January 15, 2026.

Diverging Paths Within the Industry

While Strategy hits pause, competitor Bitmine Immersion (BMNR) is accelerating its crypto strategy. BMNR has accumulated over 500,000 Ethereum in the past 30 days, highlighting contrasting risk assessments and strategic visions within the sector.

The once-substantial NAV premium for Strategy’s stock has evaporated. The mNAV ratio is now approaching a range of 1.0 to 1.1—a level market experts view as critical, with a drop below parity raising significant concerns.

With the key MSCI decision date of January 15 on the horizon, share price volatility is expected to persist, especially while Bitcoin continues to struggle beneath the $90,000 threshold. Strategy has fortified its balance sheet with a substantial cash buffer. Whether this capital will fund new initiatives or simply act as a safeguard against declining asset prices remains to be seen.