Strategy risks falling out of indices and losing up to $9 billion in capitalization - JPMorgan

Strategy, the largest corporate holder of bitcoin, could face a big sell-off in its shares if it is excluded from two stock indexes, JPMorgan has warned. For a company whose market value has skyrocketed thanks to its "sell stock-buy bitcoin" strategy, exclusion from the indices could not only be a blow to its capitalization, but also a test of the very viability of its crypto model.

Strategy could face a major sell-off if one of the largest providers of global stock indices MSCI excludes companies with large crypto assets from its indices, Barron's reports citing JPMorgan analyst Nikolaos Panigirtzoglou. MSCI announced plans to revise the status of such companies back in October. The decision is expected in mid-January.

"If Strategy is excluded from these indices, it could face significant valuation pressure given that the passive funds that track the indices make up a significant portion of its shareholders," said a JPMorgan analyst in a note cited by Barron's.

The bank estimates that Strategy will lose $2.8 billion if the company is removed from the MSCI USA and MSCI World indexes, and up to $8.8 billion if other index providers follow MSCI's example. For example, JPMorgan believes that Strategy could also be removed from the Nasdaq 100 index, Bloomberg writes. Other cryptocurrency companies like Mara Holdings, Riot Platforms, Hut 8 and Japan's Metaplanet could also be hit.

Exclusion from the indexes will not only be a blow to Strategy's market valuation, but will also call into question the very institutional legitimacy of such a model, Bloomberg adds. Strategy's stock price growth was due to a simple "issue shares - buy bitcoin - wait for a rally" scheme, not due to the company's fundamentals. However, Strategy's valuation now only slightly exceeds the value of its crypto reserves, indicating a loss of confidence, Bloomberg emphasizes.

"The [strategy premium from bitcoin's rise] has collapsed in recent weeks," Michael Youngworth, head of convertible bond strategy at Bank of America Global Research, told Bloomberg. - Raising capital is getting a little more difficult."

Strategy's shares initially rose more than 2% in New York trading on Nov. 21, but then began to fall sharply, by more than 5%. They updated the minimum since the fall of 2024. Compared to the beginning of 2025, the company's market value has fallen 42%. By comparison, the main U.S. stock index S&P 500 for the same period, on the contrary, rose by 11%.

Strategy papers are under pressure due to the rapid fall of bitcoin. Its price fell to almost $81,000. From the October maximum, the price of the largest crypto coin in the world has fallen by more than 30%, and the entire crypto market as a whole has lost more than $1 trillion in capitalization, Barron's emphasizes.

However, since Strategy announced its first bitcoin purchase in August 2020, its stock is still up more than 1,300%, overtaking every major stock index over the same period. The company has a market value of nearly $51 billion, making it the largest digital asset-related company, Barron's emphasizes.

The vast majority of analysts - 14 out of 16 - advise investors to buy the company's shares (Buy and Overweight ratings). The remaining two are neutral with a Hold rating (Hold advice). There are no recommendations to sell.

Wall Street's average target price of $526 suggests Strategy's market value has nearly tripled since the close of trading on Nov. 20.

This article was AI-translated and verified by a human editor