No, Virginia, Strategy Is Not Going To Sell Its Bitcoin

There are lots of things to worry about in crypto. Michael Saylor and Strategy selling bitcoin is not one of them.

My inbox is full of questions about bitcoin treasury company Strategy (MSTR, formerly MicroStrategy). Specifically, people want to know two things:

1. Will it be removed from MSCI indexes, creating forced selling of the stock?
2. Will it be forced to sell its bitcoin?

Let’s tackle them in turn.

MSCI and Strategy

On October 10, MSCI announced it was considering removing digital asset treasury companies (DATs) like Strategy from its investable indexes. This is a big deal, since nearly $17 trillion is benchmarked against those indexes. JPMorgan estimates that index funds may have to sell up to $2.8 billion of MSTR stock if the company is booted from the benchmarks.

You may be wondering: Why would MSCI do this? Its view is that DATs like MSTR are more like holding companies than operating companies. MSCI’s investable indexes exclude holding companies like REITs. Since many DATs only buy and hold crypto assets, MSCI thinks they don’t deserve a spot in the index. After discussions with clients, MSCI will announce its decision on January 15.

I do not know what MSCI will decide. As a deep index geek—I spent 10 years editing the academic publication The Journal of Indexes—I can see this going either way. Folks like Michael Saylor have pushed back hard, arguing that MSTR is very much an operating company, with a robust software business and complex financial engineering around bitcoin. That makes sense; it’s how I view their business. But it’s not a slam dunk, and I can imagine certain institutions leaning the other way. Given how divisive DATs are, and given that MSCI is currently leaning towards removing DATs, I’d guess there is at least a 75% chance Strategy gets booted.

But I’m not convinced that removal would be a big deal for the stock. $2.8 billion is a lot of selling, but my experience from watching index additions and deletions over the years is that the effect is typically smaller than you think and priced in well ahead of time. For instance, when MSTR was added to the Nasdaq-100 Index last December, funds tracking the index had to buy $2.1 billion of the stock. Its price barely moved.

I think a small part of the reason MSTR is down since October 10 is that the market is already pricing in a removal. But at this point, I don’t think you’ll see substantial swings either way.

Long-term, the value of MSTR is based on how well it executes its strategy, not on whether index funds are forced to own it.

MSTR and Bitcoin

The other question is whether MSTR will sell its bitcoin. Specifically, people are worried that:

1. MSTR will be removed from MSCI indexes;
2. The stock price will crater, dropping well below NAV; so that
3. MSTR will be forced to sell its bitcoin.

The argument feels logical. Unfortunately for the bears, it’s just flat wrong. There is nothing about MSTR’s price dropping below NAV that will force it to sell. You can look at the details and do the math yourself.

MSTR has two relevant obligations on its debt: It needs to pay about $800 million a year in interest and it needs to convert or roll over specific debt instruments as they come due.

The interest payments are not a near-term concern. The company has $1.4 billion in cash, meaning it can make its dividend payments easily for a year and a half.

Similarly, debt conversion is not a near-term issue either. The first debt instrument doesn’t come due until February 2027. Even then, it’s only about $1 billion—chump change. For context, the company has $60 billion in bitcoin.

Would insiders pressure MSTR to sell bitcoin if its stock continued trading lower? Doubtful. Michael Saylor himself controls 42% of the voting shares, and you’d be hard pressed to find a human being with more conviction on bitcoin’s long-term value. He didn’t sell the last time MSTR stock traded at a discount, in 2022.

I understand why bears want to embrace the MSTR “doom loop” idea. It would indeed be very bad for the bitcoin market if MSTR had to sell its $60 billion of bitcoin in one go—that’s akin to two years of bitcoin ETF inflows. But with no debt due until 2027 and enough cash to cover interest payments for the foreseeable future, I just don’t see it happening. It’s also worth zooming out in moments like these: As of this writing, bitcoin’s price of roughly $92,000 is 27% below its highs—and 24% above the average price at which Strategy acquired its stash ($74,436). So much for the doom.

Conclusion

If you want to worry about something in crypto, there are things to focus on. I’m a little concerned over the slow progress of market structure legislation through Congress, for instance, although I think it will pick up speed now that the government is open. I worry about some of the small and poorly run DATs, which may indeed fold. And I don’t think DATs will buy a lot of bitcoin in 2026, removing a big source of recent demand.

But when it comes to Strategy:

1. I wouldn’t worry about the impact of MSCI’s decision on the stock price, which is smaller than most people think and likely baked in; and
2. There’s no plausible near-term mechanism that would force it to sell its bitcoin. It’s not going to happen.

Conviction in bitcoin has a cost: It demands hard-nosed patience when the volatility hits. Nobody knows that better than Saylor and Strategy. That’s because they also grasp the flip side—how, over the long term, that patience can be rewarded.

Risks and Important Information

No Advice on Investment; Risk of Loss: Prior to making any investment decision, each investor must undertake its own independent examination and investigation, including the merits and risks involved in an investment, and must base its investment decision—including a determination whether the investment would be a suitable investment for the investor—on such examination and investigation.

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