Strategy Faces Potential Index Exclusion Over Bitcoin Holdings

The investment firm Strategy is confronting a critical juncture that could reshape its standing in major market indices. Index provider MSCI is conducting a review, with a conclusion expected by January 15, 2026, to determine whether the company should be reclassified as a “fund” rather than an operational business entity. This reassessment is directly linked to Strategy’s substantial Bitcoin reserves. Analysts at JPMorgan estimate that such a reclassification could trigger forced selling by passive funds totaling approximately $8.8 billion.

A Disconnect Between Asset and Share Price

Strategy’s shares traded near their 52-week low on Friday, around $155, even as Bitcoin itself saw modest gains, priced at $89,334. This divergence highlights a growing investor concern. The premium the stock once commanded relative to its net asset value has largely evaporated. Two primary factors are at play: dilution from recent capital raises and a shift in investor sentiment following the launch of spot Bitcoin ETFs, which ended Strategy’s monopoly as a primary institutional gateway to cryptocurrency. Notably, these ETFs recorded outflows of $4.57 billion by the end of 2025, signaling a broader cooling appetite for indirect Bitcoin exposure.

The Core of the Controversy: A Concentrated Balance Sheet

The potential for index exclusion stems from a significant transformation in Strategy’s asset composition. Since adopting its Bitcoin strategy in 2020, the company has amassed 672,497 BTC in its corporate treasury. This holding now represents more than half of its total assets, marking the first time the firm has reported losses for six consecutive months.

MSCI’s guidelines pose a direct threat. If the cryptocurrency allocation permanently exceeds the 50% threshold, the reclassification becomes likely. For countless passive index funds mandated to track specific categories, Strategy would become an ineligible holding, regardless of its fundamental outlook.

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

Despite this looming risk, Strategy’s management continues to accumulate. A recent purchase involved $108.8 million allocated to acquire an additional 1,229 Bitcoin at an average price of $88,568 per coin. This expenditure was facilitated by capital raises completed late in 2025, which gathered $2.67 billion.

Technical and Sentiment Pressures Mount

From a chart perspective, the equity is showing signs of strain. Its Relative Strength Index (RSI) sits at 31, indicating oversold conditions, yet a clear stabilization has failed to materialize. Market technicians view the $151.42 support level as a crucial line in the sand; a breach below this point could precipitate further technical selling.

While the majority of analysts (88.9%) maintain “Buy” ratings on the stock, these recommendations are largely predicated on long-term bullish scenarios for Bitcoin itself. In the immediate term, the index question overshadows all else.

The January Deadline

All eyes are now fixed on the January 15 decision from MSCI. Market movement is likely to be limited until clarity is achieved. A confirmation of Strategy’s current status would help alleviate selling pressure, whereas a formal reclassification would likely unleash the feared wave of passive fund divestment. The stock’s near-term trajectory appears inextricably tied to this regulatory categorization, potentially overriding even Bitcoin’s own market performance in driving price action for Strategy shares.