2026-01-02 10:21:41

The biggest variable in this year's market performance is probably the performance of MicroStrategy, the Bitcoin-related stock. MSTR experienced nearly a 50% decline throughout 2025. As a "leverage proxy" for Bitcoin, its stock price volatility far exceeds that of Bitcoin itself, making the risk premium obvious.

The turning point came with a proposal from MSCI. The index provider suggested removing companies with digital asset holdings exceeding 50% from the index, arguing that they are no longer traditional operating companies but more like investment institutions. The problem is, MicroStrategy's Bitcoin holdings account for as much as 77%-81%, well over the threshold.

On the surface, the index adjustment mainly impacts passive funds. As long as there is no liquidity crisis or break in the financing chain, the company will not be forced to sell its Bitcoin. But in the long run, this will be a heavy blow to companies like "Bitcoin Treasury" that rely on financing.

MicroStrategy's approach is to continuously raise funds through targeted offerings (ATM financing) and convertible bonds to buy Bitcoin. The premise of this leverage flywheel is maintaining an attractive stock price. Once kicked out of major indices, a sharp drop in stock price and a sudden contraction of valuation premiums could cause this financing model to falter, rapidly depleting its financing capacity.

What’s more painful is that if passive fund withdrawals cause significant stock price volatility (estimated outflows between $2.8 billion and $8.8 billion), combined with the overall sluggishness of the crypto market, the company could approach the warning line for debt repayment or pledge agreements. At that point, reducing Bitcoin holdings will no longer be an option but a forced emergency measure—Saylor has said that selling Bitcoin is the last resort.

MSCI is expected to officially announce the final decision on January 15, 2026. This market adjustment could become a key turning point in the entire cycle.

BTC1,61%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

17 Likes

Reward
17
9
Repost
Share

Comment

0/400

On-ChainDiver

· 14h ago

MSTR this time is really hanging by a thread. Once the leverage flywheel stops, it's game over. Being kicked out of the index is the first domino, and Saylor's entire financing logic has completely collapsed. Wait, will Saylor really sell his coins? I feel like he won't let go even if it means the company goes bankrupt. Exhaustion of financing ability is more terrifying than the decline itself. Those still buying MSTR now are all gamblers. $28 billion to $88 billion outflow? Now there's really a hole being punched through. Basically, the rules of passive capital have changed. Active investors can still buy the dip, but passive ones can only accept defeat.

View OriginalReply0

MevTears

· 21h ago

If Saylor is really kicked out of the index this time, it’s not just a 50% drop... The financing chain is broken, and the Bitcoin treasury playbook is completely over. --- With MSCI taking this action, MSTR’s leverage flywheel will come to a halt, but convertible bonds and ATM financing can still be used? LOL. --- Waiting to see the show on January 15th. If you ask me, Saylor should have realized the risk long ago, betting all chips on the index remaining stable... too naive. --- Outflows from $2.8 billion to $8.8 billion? That will definitely trigger the warning line. Selling coins won’t be an option then; being forced to cut losses is the real scenario. --- If this wave really happens, Bitcoin and MSTR will go down together... passive funds are really ruthless. --- Saylor said selling coins is the bottom line, but even the bottom line can’t withstand an index adjustment haha... reality will teach him what it means to have no bottom line. --- MSCI just made this suggestion, and MSTR is immediately stuck in a deadlock? It feels like financing costs are skyrocketing, and the valuation premium is gone.

View OriginalReply0

DegenDreamer

· 21h ago

Saylor might really be forced to cut losses this time; once the leverage flywheel stops, there's no turning back. The "leveraged proxy" play with MSTR was already risky, and now with MSCI's cut, it's directly deadly. If the financing mode breaks, it's truly uncertain. Wait, announced on January 15? During this period, MSTR is probably going to be hammered down as a pre-emptive exit chip. Saylor said selling coins is the bottom line, but it might really turn into an emergency response, quite ironic. The risk of moving is too high, with outflows reaching between 2.8 billion and 8.8 billion USD... who can withstand that? Once the index is kicked out, the valuation premium instantly disappears, and the leverage model is completely bankrupt. The logical chain is tightly connected. The Bitcoin treasury scheme seems to be a capital game; the risks are not obvious in normal times.

View OriginalReply0

ChainWanderingPoet

· 01-02 10:51

Saylor is really gambling with his life this time. Once the leverage flywheel stalls, it's a domino effect. Outflows of $2.8 billion to $8.8 billion? That's a life-threatening pace. The MSTR financing model is essentially a game of hot potato; the stock price is its lifeline. Once the index kicks it out... I want to see how Saylor explains why he's selling coins. A 50% drop isn't over yet. When MSCI makes a final decision, it might be the real meat grinder. The Bitcoin treasury concept was inherently fragile; adding leverage is a ticking time bomb. Now, it's really about who can survive until 2026.

View OriginalReply0

LiquidationWizard

· 01-02 10:50

Saylor's sword is hanging over his head. Once the financing flywheel breaks, he will have to sell coins, and then the coin price will also crash. The leveraged play in mstr has long been a ticking time bomb; the index adjustment is just the fuse. In the end, it still depends on whether BTC can perform well or not. Otherwise, a $28 to $88 billion dump is all talk. It's a gambler's mentality, thinking that if the index can't kick out, then it's fine... Wrong. That 50% decline is not even a high point; once the index rules change, the real bloodbath will begin.

View OriginalReply0

ContractFreelancer

· 01-02 10:48

Oh no, MSTR's leverage play really has a sword hanging over its head. Once kicked out of the index, it's game over. If the financing ability is exhausted, how can they continue buying coins? The flywheel can't spin anymore. If Saylor is really forced to sell coins, the price could drop to a new low, which is terrifying. On January 15th, we probably need to watch out for liquidation warnings; I can't sleep. Basically, it's a leverage game played to the end, and an index adjustment is the fuse.

View OriginalReply0

RugResistant

· 01-02 10:34

tbh this MSCI thing is a straight up red flag i wasn't expecting... 77-81% bitcoin allocation basically screaming "we're not a real business anymore" lmao

Reply0

RegenRestorer

· 01-02 10:33

Saylor's hand is really tough to play right now. Once the leverage flywheel stops, it's all over. Selling coins is truly the last line of defense. I can already imagine the scene of being forced to dump. MSCI's move was too precise; toe the line and you're out. It's really a bit desperate. Outflows from $28 billion to $88 billion... Just thinking about it is a bit terrifying. If this wave collapses, the entire ecosystem will tremble. Financing costs have skyrocketed, and stock prices will fall again. Who dares to take over? Instead of waiting for January 15th, it's better to think about an exit strategy now. Anyway, Saylor is betting on the coin price. If the coin doesn't rise, everything is pointless. This could really be a watershed moment in the cycle. Choosing the wrong side means GG.

View OriginalReply0

BlockBargainHunter

· 01-02 10:24

Saylor really went all in, once he's kicked out of the index, it's basically a dead end. Holding 77% of Bitcoin is way too heavy, isn't this just a naked message to MSCI: "Come and mess with me"? Once the financing chain breaks, the leverage flywheel will instantly reverse, and selling coins will be forced... This round is a bit risky. Outflows from 2.8 billion to 8.8 billion can easily crash the stock price just by thinking about it. The decision on January 15th feels like a time bomb; the crypto market will have to follow and suffer again. After the financing model collapses, what can MSTR do? Just hoard coins and wait to die. This logic has actually been there all along; MSCI is just the one tearing the paper.

View OriginalReply0