Strategy (MSTR) Stock: MSCI Threatens Index Exclusion as Company Buys $835 Million Bitcoin Dip

TLDR

• Strategy purchased 8,178 Bitcoins for $835.6 million in the week prior to November 17, bringing total holdings to 649,870 tokens worth $54.37 billion
• Bitcoin’s price dropped to $83,669 on November 21, down 32% from its October peak of $126,272
• MSCI is consulting on removing companies with 50% or more assets in digital currencies from its global investable market indexes
• Strategy faces potential outflows between $2.8 billion and $8.8 billion if removed from MSCI indices
• JPMorgan analysts warn exclusion could trigger billions in outflows from ETFs and mutual funds tied to MSCI benchmarks

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Strategy continues buying Bitcoin even as mounting pressure from index providers threatens to shake up its stock. The company formerly known as MicroStrategy added 8,178 Bitcoins to its treasury in the week ending November 17. The purchase cost $835.6 million.

MicroStrategy Incorporated, MSTR

Chairman Michael Saylor announced the transaction through the company’s weekly securities filing. Strategy has become the world’s largest corporate holder of Bitcoin since starting its treasury in 2020.

The company now owns 649,870 Bitcoin tokens. These holdings were purchased for a total of $48.37 billion. As of November 21, the tokens were valued at $54.37 billion, representing a 12% gain over the purchase price.

Bitcoin’s recent price action has been rough. The cryptocurrency traded as low as $86,010 on November 20. This marked a 32% drop from the all-time high of $126,272 reached in early October.

Bitcoin (BTC) Price

By the morning of November 21, Bitcoin had fallen another 3.1% over 24 hours to $83,669. The decline comes as investors move away from risk-on assets over concerns about artificial intelligence valuations.

Bitcoin surged past $100,000 in December 2024 on expectations of friendly crypto regulations. On November 4, it dropped below that threshold for the first time since May. Nearly a year later, the regulatory optimism has cooled.

Index Provider Review Creates Uncertainty

MSCI is reviewing whether companies with heavy cryptocurrency holdings should remain in its indices. The index provider is consulting on excluding firms that hold 50% or more of their assets in digital currencies.

Strategy currently appears in the Nasdaq 100, MSCI USA, and MSCI World indexes. JPMorgan analysts estimate the company could face outflows between $2.8 billion and $8.8 billion if MSCI moves forward with the exclusion.

The bank warned that billions of dollars could exit ETFs and mutual funds tied to MSCI benchmarks. While active fund managers aren’t required to match index changes, the exclusion could create negative sentiment.

Capital Raising Concerns Mount

Removal from major indices could make it harder for Strategy to raise money through equity or debt offerings. The company has been regularly buying Bitcoin through capital raises.

Strategy made purchases every day during the week prior to November 17. This buying pattern continued despite Bitcoin’s price slide. The company’s weekly disclosures have become a closely watched indicator of its confidence in crypto.

The last time Strategy paused Bitcoin purchases was between September 29 and October 5. Any week without buying could signal shifting sentiment. So far, the company shows no signs of slowing down.

Strategy stock fell roughly 3% on Friday morning as news of the potential MSCI exclusion spread. The shares face pressure from both falling Bitcoin prices and the index provider’s review.

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