Strategy’s Worst Month Since 2024 Pushes Its Market Cap Below Its Bitcoin Holdings — But Retail Bulls Are Unfazed

• JPMorgan analysts cautioned that the stock faces risk if MSCI decides to exclude digital asset treasury companies from its various indexes.
• Michael Saylor, the chair of Strategy who played a key role in pioneering the concept of digital asset treasuries in 2020, has doubled down on Strategy’s bet.
• The company did not buy any Bitcoin last week, after a six-week streak of continuous buying.

Strategy (MSTR) stock has declined by over 36% in November, putting it on track for its worst monthly decline since April last year.

The company’s shares have logged declines in the past seven consecutive weeks. However, this week, Strategy shares have gained nearly 1% after cryptocurrency markets pared some losses on increased bets of a rate cut by the Federal Reserve.

The company currently holds 649,870 Bitcoins, valued at over $56 billion. Its market capitalization has slipped to $49.5 billion. Strategy now trades at a discount to the value of its Bitcoin holdings.

JPMorgan’s Warning Weighs

Last week, JPMorgan analysts cautioned that the stock faces risk if MSCI decides to exclude digital asset treasury companies from its various indexes. The warnings came as the popular investment research firm MSCI, formerly known as Morgan Stanley Capital International, was set to decide whether to remove digital asset treasury companies from its indexes. A removal could cause a selloff with funds tracking the indexes, reducing their exposure to the Strategy.

JPMorgan estimated Strategy's shares could face roughly $2.8 billion in forced selling if it's dropped from MSCI indexes such as MSCI USA and MSCI World — and as much as $8.8 billion if other index providers like Russell follow suit.

The cautious tone added further pressure to the firm, which is the biggest corporate holder of Bitcoin. The apex cryptocurrency has fallen over 24% over the past month, just after hitting an all-time high of over $126,000, amid profit-taking, a large liquidation event in October, and concerns over the Federal Reserve’s interest rate policy.

Saylor On Defiant Mood

Michael Saylor, the chair of Strategy who played a key role in pioneering the concept of digital asset treasuries in 2020, has doubled down on Strategy’s bet, posting that he “won’t back down” on X last week. Later, in an interview with CoinDesk, he labeled the crypto market's volatility “vitality” and dubbed the recent drop “Satoshi’s gift to the faithful,” a reference to the mysterious creator of the biggest cryptocurrency.

However, the company did not buy any Bitcoin last week, after a six-week streak of continuous buying. Saylor on Monday said it’s "probably nothing", sharing a chart that showed Bitcoin (BTC)-backed loans through its specialized digital structured products hit an all-time high last week.

According to the chart, for the week ending November 21, weekly volume across Strategy’s suite of offerings, which includes STRFC, STRF, TRF, and TRD, hit a new all-time high of $18.9 million.

What Are Stocktwits Users Thinking?

Retail sentiment on Stocktwits about Strategy was in the ‘bullish’ territory, compared with ‘bearish’ a month ago.

“Short covering will be epic when this pops,” one trader said.

Another trader suggested that Donald Trump might lend a helping hand to Saylor, without specifying what it could be. Republican legislators are currently trying to push multiple crypto regulatory bills to Trump’s desk by January next year.

Strategy shares have fallen over 42% this year, compared with Bitcoin’s 6.3% decline.

Also See: Robinhood Stock Braces For Worst Month Since 2022 Amid Bitcoin Slide – Retail Cheers Prediction Markets Push

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