Strategy Stock Breathes Easier as Index Exclusion Threat Fades

Shareholders of Strategy received a crucial reprieve this week. MSCI, the global index provider, announced it will not remove companies with substantial cryptocurrency holdings from its flagship world indices. This decision averts an immediate threat of forced selling that had loomed over the stock, potentially involving billions of dollars. However, the relief is tempered by new rules that may significantly constrain the company’s aggressive growth strategy.

The announcement from MSCI on Tuesday evening ended weeks of market uncertainty. Firms categorized as "Digital Asset Treasury Companies," which hold a major portion of their balance sheets in crypto assets, will remain part of critical market benchmarks. Analysts at JPMorgan had previously warned that an exclusion from indices like the MSCI USA Index could have triggered massive disruptions. Passive funds tracking these benchmarks would have been compelled to offload Strategy shares worth up to $8.8 billion.

With this existential threat to the share price now removed, markets responded positively. Strategy’s stock stabilized, posting gains of over 6% since the start of the week.

Fresh Constraints on a Core Strategy

The sense of relief is overshadowed by new restrictions that could hamper Strategy’s operational model. MSCI is implementing limitations that may slow the company’s ability to pursue its Bitcoin acquisition strategy at its previous pace:

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

• Suspended Automatic Buying: Index funds will no longer be required to automatically purchase newly issued Strategy shares that are created to fund Bitcoin buys.
• Frozen Index Weighting: The company’s weighting within relevant indices will not increase, for now, as a result of new capital measures.

This strikes at a fundamental nerve. Over the past five years, Strategy has raised nearly $50 billion through equity and debt issuance specifically to accumulate Bitcoin. The loss of guaranteed demand from passive index funds removes a key buyer for future share offerings. Market observers view this as a structural headwind for the company’s ability to raise capital moving forward.

Bitcoin Downturn Leaves a Mark on Fundamentals

The recent correction in cryptocurrency markets has materially impacted Strategy’s financial standing. As Bitcoin’s price fell from its October 2025 high of $126,000 to approximately $91,000, the company was forced to report a massive unrealized loss of $17.44 billion for the fourth quarter of 2025.

A notable shift is also evident in the stock’s valuation. Historically, the shares have traded at a premium to the value of the underlying Bitcoin holdings. They now trade at a discount to the net asset value (NAV), suggesting investors are currently assigning greater weight to the risks than the opportunities. Despite this, the company continues its acquisition program, having recently purchased 1,286 Bitcoins for approximately $116 million.

Strategy is scheduled to release its full quarterly results on February 4, 2026. Investors will scrutinize management’s plans to navigate the tension between continued Bitcoin accumulation and the more restrictive index rules. A key focus will be whether the firm’s target of generating an annual "Bitcoin yield" of 30% remains sustainable under these new conditions.