MSTR Could Be Forced Out of MSCI — Here’s What That Means

[bonk]

Chart Overview
This chart compares MicroStrategy (MSTR) vs Bitcoin (BTC) on a YTD returns basis.
After several years of extreme outperformance, 2025 marks the first major divergence in years:

BTCUSDT
YTD: about –4%

MSTR
YTD: about –41%

From highs: MSTR trades ~–63%

This is the widest decoupling in the last cycle, and it reflects a structural break in how the market prices MSTR.

1. MSTR = Leveraged Bitcoin With Higher Beta

For years, MicroStrategy acted as a leveraged Bitcoin proxy:

Higher beta than BTC

Equity issuance used to buy more BTC

mNAV premium amplified upside moves

Investors treated it like an ETF with embedded leverage

When BTC rallied, MSTR rallied even more.
That dynamic is now reversing.

2. The mNAV Premium Has Collapsed Into Discount

The second chart (mNAV Analysis) tells the real story:

Historical mNAV premium: often 1.5x–3.5x

Current levels: ~1.46x, falling toward 1.0x

In recent weeks, intraday prints have even touched discount territory (<1.0x)

This is critical:

️ MSTR only outperforms BTC when it trades at a premium to NAV.

When that premium evaporates, the “leveraged BTC” thesis breaks.

Today the market is pricing:

Higher risk,

Lower confidence,

Reduced ability to issue accretive equity,

And potential forced selling due to MSCI.

The entire flywheel depends on that premium — and it’s now gone.

3. The MSCI Catalyst: A Binary Structural Event

MSCI is reviewing whether companies with >50% digital asset exposure should remain in:

MSCI World

MSCI USA

MicroStrategy fits the proposed category perfectly:

️ Digital Asset Treasury Company
️ Balance sheet ~70% BTC

Decision date: January 15, 2026

If excluded:

Forced selling: ~$2.8B

Potential cascade: up to $8.8B

Equivalent to 15–20% of MSTR’s market cap

These outflows are mechanical, not discretionary.

4. Liquidity Risk: The Hidden Problem

The October 10th BTC drop exposed MSTR’s fragility:

~17% BTC drop

~90% liquidity evaporation in MSTR’s order book

Thin depth for a company of this size

Large block orders cause outlier moves

If MSCI-related outflows hit in a volatile period,
MSTR may not have enough liquidity to absorb multi-billion flows.

This is not a solvency problem — it’s a market microstructure problem.

5. The Paradox: While Risks Rise, MSTR Keeps Buying

Recent actions:

Purchased 8,178 BTC (~$830M)

Issued five BTC-backed structures this year

Continues using financing to expand BTC exposure

Saylor reiterates resilience even under 75–90% BTC drawdowns

If MSCI does not exclude MSTR, the stock could stage a violent rerating
because the market has already priced in significant downside risk.

6. Key Takeaways

MSTR has decoupled sharply from BTC in 2025

The mNAV premium has collapsed, removing its leveraged upside

MSTR now trades near or below NAV, losing its structural advantage

MSCI’s January decision is the defining catalyst

If excluded → forced selling

If retained → high-beta rebound potential

MicroStrategy is no longer just a BTC proxy.
It is now a test of:

Index methodology,

Market microstructure,

Capital-structure engineering,

And whether a listed company can operate as a quasi-ETF on Bitcoin.

[Nahid Hossen]

This is the widest decoupling in the last cycle, and it reflects a structural break in how the market prices MSTR.

[Nahid Hossen]

If MSTR drops from MSCI indexes, passive outflows could add short-term pressure.