$8.8 billion flight countdown: MSTR is becoming a global index fund outcast.

Recently, Bitcoin's sharp decline has also negatively impacted MicroStrategies.

MSTR's stock price has fallen from a high of $474 to $177, a drop of 67%. During the same period, Bitcoin's price fell from $100,000 to $85,000, a drop of 15%.

Even more damaging is mNAV, the premium of market capitalization relative to Bitcoin's net asset value.

At its peak, the market was willing to pay $2.50 for every $1 of Bitcoin held by MSTR; now that figure is $1.10, with almost no premium.

The old model was: issue shares → buy Bitcoin → stock price rises (because of the premium) → issue more shares. Now that the premium has disappeared, issuing shares to buy Bitcoin has become a zero-sum game.

The old model was: issue shares → buy Bitcoin → stock price rises (because of the premium) → issue more shares.

Now that the premium has disappeared, issuing shares to buy Bitcoin has become a zero-sum game.

Why is this happening? Of course, the recent sharp drop in Bitcoin is one reason. But the fact that MSTR has fallen so much more drastically than BTC suggests an even bigger fear: MSTR may be removed from major global stock indices. Simply put, trillions of dollars in global funds are "passive investors"; they don't pick and choose stocks, they just mechanically buy all the constituent stocks in an index. If you're in the index, this money automatically buys you; if you're kicked out, this money must sell you, no questions asked. This decision rests with several large index companies, with MSCI being the most important. Now, MSCI is considering a question: when 77% of a company's assets are in Bitcoin, is it still a normal company? Or is it actually a Bitcoin fund disguised as a listed company? The answer will be revealed on January 15, 2026. If MSTR is indeed kicked out, approximately $8.8 billion in passive funds will be forcibly withdrawn. For a company that relies on printing stocks to buy cryptocurrency, this is practically a death sentence. When Passive Funds Can't Buy MSCI Indices What is MSCI? Imagine it as the stock market's "college entrance exam question setter." Trillions of dollars in global pension funds, sovereign wealth funds, and ETFs track indices compiled by MSCI. These funds don't do research or look at fundamentals; their task is simply to perfectly replicate the index—they buy whatever is in the index; they don't touch anything not in the index. In September of this year, MSCI began discussing a question: If a company's digital assets (primarily Bitcoin) exceed 50% of its total assets, can it still be considered a "normal publicly traded company"? On October 10th, MSCI released a formal consultation paper. The logic of the paper is straightforward: companies holding large amounts of Bitcoin are more like investment funds than "operating businesses." And investment funds are never allowed to be included in stock indices. Just like you wouldn't put a bond fund in a tech stock index. What is the current situation at MicroStrategy? As of November 21, the company held 649,870 bitcoins, worth approximately $56.7 billion at current prices. The company's total assets are estimated at $73-78 billion. Bitcoin holdings represent 77-81%, far exceeding the 50% threshold. Worse still, CEO Michael Saylor has never concealed his intentions. He has stated publicly on multiple occasions that the software business generates only $116 million in quarterly revenue, and its primary purpose is to "provide cash flow to service debt" and "provide regulatory legitimacy for the Bitcoin strategy." What if it gets kicked out? According to a research report by JPMorgan Chase on November 20th, if MSTR is only removed from MSCI, it will face approximately $2.8 billion in passive capital outflows. However, if other major index providers (Nasdaq, Russell, FTSE, etc.) follow suit, the total outflow could reach $8.8 billion. MSTR is currently included in several major indices: MSCI USA, Nasdaq 100, Russell 2000, etc. Passive funds tracking these indices collectively hold approximately $9 billion in MSTR shares. Once removed from the index, these funds must sell. They have no option; this is stipulated in their fund bylaws. What does $8.8 billion mean? MicroStrategy's daily trading volume is approximately $3-5 billion, but this includes a significant amount of high-frequency trading. If $8.8 billion in one-way selling pressure is released in the short term, it's equivalent to two or three consecutive days of only selling orders with no buying orders. Keep in mind that MSTR's daily trading volume is $3-5 billion, but this includes high-frequency trading and liquidity provided by market makers. $8.8 billion in one-way selling pressure is equivalent to 2-3 days of all trading volume being sell orders. The bid-ask spread will widen from the current 0.1-0.3% to 2-5%. History tells us that index corrections are ruthless. When Tesla was included in the S&P 500 in 2020, its trading volume reached 10 times the usual amount in a single day. Conversely, when General Electric was removed from the Dow Jones Industrial Average in 2018, its stock price fell by 30% within a month of the announcement. The consultation period ended on December 31st. The official ruling will be announced on January 15th next year. Based on the current rules in the MSCI consultation document, being removed is almost a certainty. The flywheel of issuing shares to buy cryptocurrencies is stuck. MicroStrategy's core strategy over the past five years can be simplified into a cycle: issue shares to raise money → buy Bitcoin → stock price rises → issue more shares. This model only works if the stock has a premium. If the market is willing to pay $2.50 for every $1 of Bitcoin a company holds (mNAV = 2.5x), then issuing new shares to buy Bitcoin can create value. You dilute 10% of your shares, but your assets could increase by 15%, so shareholders still profit overall. At its peak in 2024, MicroStrategy's mNAV did indeed reach 2.5x, and even briefly touched 3x. The market's reasons for this premium included Saylor's execution capabilities, first-mover advantage, and the fact that it provided a convenient channel for institutions to indirectly hold Bitcoin. However, now mNAV has fallen to 1, essentially at par. The market may have already priced in MicroStrategy's removal from the MSCI index. Once removed from major indices, MicroStrategy will transform from a mainstream stock into a niche Bitcoin investment vehicle. A case in point is the Grayscale Bitcoin Trust (GBTC), which, after the emergence of better Bitcoin ETFs, went from a 40% premium to a long-term 20-30% discount. When mNAV approaches 1, the flywheel stops turning. Issuing $10 billion worth of new shares and buying $10 billion worth of Bitcoin doesn't change the company's total value. It's just a transfer of funds from one hand to the other, diluting existing shareholders and creating nothing. Debt financing is still an option; MicroStrategy has already issued $7 billion in convertible bonds. But debt must be repaid, and when the stock price falls, convertible bonds become pure debt burdens rather than quasi-equity. Saylor's Response and Market View Facing the threat of potential MSCI exclusion, Michael Saylor's response is very characteristic of his style. On November 21st, he published a long article on X, the core argument being: MicroStrategy is not a fund, not a trust, and not a holding company. And he used the art of language to circumvent MSCI's characterization: "We are a publicly traded company with a $500 million software business, employing a unique Bitcoin capital strategy." He emphasized that funds and trusts merely passively hold assets, while MicroStrategy "creates, builds, issues, and operates." This year, the company completed five public offerings of digital credit securities: STRK, STRF, SRD, STRC, and STRE. The implication is: we are not simply hoarding coins, but engaging in complex financial operations. However, the market seems unconcerned with these explanations. MSTR's stock price has decoupled from Bitcoin; not in a sense, its correlation has decreased, but rather it has fallen even more sharply than Bitcoin. This likely reflects market concerns about its index status. Joy Lou, a partner at Cycle Capital, posted (https://x.com/Joylou1209/status/1991856210547703855) that daily trading volume could plummet by 50-70% within 90 days of a stock being removed from the index. Even more critical is the debt issue. MSTR has $7 billion in convertible bonds with conversion prices ranging from $143 to $672. If the stock price falls to the $180-$200 range, debt pressure will increase dramatically. Her conclusion is pessimistic. After the liquidity crunch, the risk of MSTR falling below $150 will increase sharply. Other community analyses also express pessimism. For example, after MSTR is removed from the index, ETFs will automatically sell off, causing stock declines and dragging down BTC, creating a vicious cycle of a "Davis Double Kill." The so-called "Davis Double Kill" refers to a sharp drop in stock price caused by a decline in valuation and earnings per share. Interestingly, these analysts all mentioned one word: **passive**. Passive funds passively sell off, passively triggering debt clauses and passively losing liquidity. MSTR has gone from an active Bitcoin pioneer to a passive victim of the rules. The market consensus is becoming increasingly clear: this is not a matter of Bitcoin's price fluctuations, but rather that the rules of the game have changed. Saylor reiterated his stance of never selling Bitcoin in a recent interview. While MSTR has proven that companies can go all-in on Bitcoin, the MSCI index may be demonstrating that the cost is being ostracized by the mainstream market. Is DAT still a good business below the 50% red line? MicroStrategy isn't the only publicly traded company holding a large amount of Bitcoin. According to MSCI's preliminary list, 38 companies are under observation, including Riot Platforms, Marathon Digital, and Metaplanet. They are all watching to see what happens on January 15th. The rule is clear: 50% is the red line. Exceed that, and you're a fund, not a company. This draws a clear line for all DAT companies: either keep their crypto holdings below 50% to remain in the mainstream market, or exceed 50% and face exile. There is no middle ground. You can't both enjoy the passive buying of index funds and become a Bitcoin fund yourself. MSCI rules don't allow this arbitrage. This is a blow to the way companies hold crypto assets across the board. For the past few years, Saylor has been preaching, persuading other CEOs to add Bitcoin to their balance sheets. MSTR's success (its stock price once increased tenfold) was the best advertisement, and now that advertisement is being taken down. In the future, companies wanting to hold large amounts of Bitcoin may need new structures. For example: Establishing an independent Bitcoin trust or fund; indirectly holding Bitcoin through purchasing Bitcoin ETFs; keeping it below the 49% "safety line"; Of course, some people think this is a good thing. Bitcoin shouldn't rely on a company's financial engineering. Let Bitcoin be Bitcoin, let companies be companies, each in its proper place. Five years ago, Saylor pioneered corporate Bitcoin strategies. Five years later, it seems like this is about to be ended by a boring financial document. But this may not be the end, but rather forcing the market to evolve into a new model. Because of the MSCI 50% red line, MicroStrategy won't go bankrupt, and Bitcoin won't go to zero. But the era of unlimited "printing stocks to buy cryptocurrencies" is over. However, for investors still holding MSTR and various DAT company stocks, are you buying MSTR because you're bullish on Bitcoin or on Saylor himself? If the former, why not just buy the cryptocurrency or an ETF? After being removed from the index, MSTR will become a niche investment. Liquidity will decrease, and volatility will increase. Can you accept that? The final result will be revealed on January 15, 2026; the market has already begun to vote with its feet.