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Shares of Strategy (formerly MicroStrategy) (MSTR) had a tough year in 2025, falling 49.3% due to sustained selling pressure that pushed the stock to its lowest levels since the end of September 2024.
As 2026 begins, the challenge continues to loom, with the company facing growing uncertainty over its potential exclusion from the MSCI index as the January 15 decision deadline approaches.
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Why Micro Strategy Stock Suffered in 2025
The cryptocurrency market had a tough year in 2025, and digital asset vaults were not immune. It shows the extent of the influence Strategic performance of actions.
Market data indicates that MSTR’s stock has lost 49.3% of its value in 2025, with losses accelerating in the second half of the year.
Analyst Ted Bellows explained the magnitude of the decline, noting that MSTR’s stock has dropped 66% in just the last six months. According to Bellows, about $90 billion was wiped from the company’s market value.
He pointed out several factors that contribute to this, starting with The poor performance of Bitcoin in terms of prices. The largest digital currency ended 2025 with a decline of 5.7%, challenging Many optimistic predictions. The modest performance put significant pressure on the strategic stock.
The company is closely linked to Bitcoin, as it is the largest institutional holder of this asset. The company owns 672,497 BTC, equivalent to about 3.2% of the total Bitcoin supply.
According to previous reports from BeInCryptoStrategy has spent more than $50 billion raising Bitcoin, financing mainly through the issuance of debt and the sale of shares. In contrast, the company’s software sector generates annual revenue of about $460 million, a number that seems small compared to its exposure to digital assets.
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Although Strategy currently holds about $59 billion of Bitcoin, its total market capitalization is about $46 billion, raising concerns about valuation and balance sheet risks.
Bellows stated that the price is now trading at a discount of between 20% and 25%, about 20% to 25% less than the value of its possible underlying Bitcoins.
Point out several other factors besides the btc price, such as:
Bellows spoke of aggressive dilution of stake, the risks of being excluded from the index, the potential of pressure to delist the stock, and a complete collapse of the first NAV.
However, the company continued to increase its exposure to Bitcoin. In fact, Strategy has previously confirmed that its balance sheet is strong enough to handle significant Bitcoin price declines.
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The company published that if the BTC price fell to our average cost price of $74,000, we would still have 5.9x assets versus convertible debt, which we refer to as the BTC valuation of our debt. And at $25,000 btc, it would be 2.0x.
MSCI’s decision poses a major risk to the strategy
The strategy faces a more pressing structural challenge related to a pending MSCI decision, although general market conditions may change.
MSCI proposed to reclassify companies whose digital assets exceed 50% of total assets as “funds”. The move could be ruled out by major stock indexes.
The ramifications of this are significant for a strategist. The final decision is expected to be published by January 15, which could lead to the company being excluded from the MSCI index.
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JPMorgan estimated that excluding MSCI could cause outflows of $8.8 billion. This will put more pressure on Strategic’s share price, especially at a time when investor sentiment is still fragile. Therefore, all eyes are now on MSCI’s decision, as it can determine the stock’s strategic performance in the near term.
