Strategy (formerly MicroStrategy) stock (MSTR) will have a tough year in 2025, with sustained selling pressure causing the stock price to fall to its lowest level since late September 2024, down 49.3%.
As 2026 begins, the outlook remains bleak, with the company facing increasing uncertainty over its possible removal from the MSCI index as the January 15 decision deadline approaches.
Why (micro)strategy stock prices were sluggish in 2025
2025 turned out to be a tough year for the cryptocurrency market, and the digital asset treasury was no exception. The impact of this was clearly visible in the performance of strategy stocks.
According to market data, MSTR lost 49.3% of its value in 2025, and its losses accelerated in the second half of the year.
MSTR stock performance. Source: Google Finance
Analyst Ted Pillows highlighted the scale of the economic downturn, noting that MSTR has fallen 66% in the past six months alone. According to Pillows, nearly $90 billion has been wiped from the company’s market capitalization.
He pointed to several factors, including Bitcoin’s overwhelming price performance. The largest cryptocurrency ended 2025 down 5.7%, defying many bullish predictions. The poor performance put significant pressure on Strategy’s stock price.
The company has close ties to Bitcoin and is the largest holder of Bitcoin assets. It holds 672,497 BTC, which is approximately 3.2% of the total Bitcoin supply.
As BeInCrypto previously reported, Strategy has spent more than $50 billion amassing Bitcoin, primarily raising funds through bond issuance and stock sales. In contrast, the company’s software business generates approximately $460 million in annual revenue, but this number pales in comparison to its exposure to digital assets.
Strategy currently holds about $59 billion worth of Bitcoin, but its market capitalization is around $46 billion, raising concerns about valuation and balance sheet risks.
“The company is trading at a 20-25% discount to its underlying Bitcoin holdings,” Pillows said.
In addition to the price of BTC, Mr. Pillows outlined several other factors, including:
“Aggressive stock dilution, risk of index deletion, potential delisting pressure, and complete collapse of NAV premiums.”
Despite this, the company continues to increase its exposure to Bitcoin. In fact, Strategy has previously emphasized that its balance sheet is strong enough to withstand a significant drop in Bitcoin prices.
“Even if BTC were to fall to our average cost base of $74,000, we would still have 5.9x equity against our convertible notes. We call this our debt BTC rating. At $25,000 BTC, it would be 2.0x,” the company posted.
MSCI’s decision poses significant risks to the strategy
While broader market conditions may continue to change, Strategies faces more pressing structural challenges related to the pending MSCI decision.
MSCI proposed reclassifying companies whose digital assets holdings exceed 50% of their total assets as “funds.” The move could result in it not being included in major equity benchmarks.
The implications for strategy are significant. A final decision is expected to be made by January 15th, and the company could be removed from the MSCI index.
JPMorgan estimates that excluding MSCI could result in an outflow of up to $8.8 billion. This would exacerbate existing stress on Strategy’s share price, as investor sentiment remains fragile. Therefore, all eyes are now on MSCI’s decision as it could affect Strategic’s near-term stock performance.
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