Strategy Inc. Faces Institutional Exodus as Confidence Wanes

Once hailed as Wall Street’s definitive Bitcoin investment vehicle, Strategy Inc.—the company formerly known as MicroStrategy—is witnessing a dramatic shift in sentiment. While Bitcoin maintains relative stability around the $90,000 threshold, a significant sell-off is underway. Major financial institutions are substantially reducing their equity positions, raising critical questions about the sustainability of the company’s highly leveraged business model and sparking fears of a severe correction.

Liquidity Concerns Take Center Stage

Beyond the headline-grabbing institutional exits, a deeper financial challenge is emerging. The company, which rebranded in August 2025, holds an enormous treasury of nearly 650,000 Bitcoins. However, its most recent Q3 report reveals a strikingly low cash position of just $54.3 million. This creates a stark contrast with its substantial annual financial obligations, specifically preferred dividend payments estimated between $650 and $700 million. Market anxiety is now focused not on solvency, but on acute liquidity: investors are questioning how these payments will be met without further shareholder dilution or the forced sale of core Bitcoin assets.

Major Players Retreat

The growing pressure on the stock has a clear catalyst: a retreat by institutional investors. Recent disclosures confirm that banking giant JPMorgan Chase & Co. slashed its stake in the Bitcoin-centric firm by approximately 772,453 shares. Market strategists interpret this large-scale divestment as a potent warning sign. Confidence in the aggressively leveraged operational strategy is eroding, and Wall Street’s risk tolerance for the “Bitcoin Treasury” concept is demonstrably shrinking. Other significant players, including asset manager BlackRock, are also reportedly adopting a more cautious stance.

The Vanishing Premium

A particularly alarming development for existing shareholders is the complete shift in the market’s valuation methodology. Historically, Strategy Inc. shares traded at a substantial premium to their Net Asset Value (NAV)—sometimes reaching 2.0 to 2.5 times the underlying value of its Bitcoin holdings. This premium has now almost entirely evaporated.

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

The stock currently trades perilously close to its NAV parity, with a factor ranging from 1.0 to 1.16. This indicates that the market no longer prices the equity as a growth stock but rather as a direct asset play. The disappearance of this speculative buffer leaves the share price almost entirely exposed to Bitcoin’s inherent price volatility, directly transferring that risk and instability to stockholders.

Index Exclusion and Further Downside Risks

All eyes are now fixed on the $90,000 support level for Bitcoin. A decisive break below this psychologically critical price point could trigger an accelerated sell-off of Strategy Inc. shares. Compounding the issue, the stock’s significant decline and reduced market capitalization have sparked speculation among analysts about a potential reduction in its weighting, or even outright removal, from major indices like the MSCI USA or the Nasdaq 100. Such an event would unleash a new wave of selling pressure from passively managed funds that track these benchmarks.

The market’s skepticism is brutally evident in the stock’s performance; since the start of the year, it has lost nearly half of its value and is currently struggling to establish a stable price floor. Until the company’s leadership presents a credible strategic plan to address its liquidity constraints, the situation remains profoundly fragile.