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Just For You

The Contrarian Case for MSTR Amid MSCI Delisting Debacle

By Nathan Reiff. Published: 12/2/2025. 

What You Need to Know

• Strategy’s pivot toward Bitcoin has backfired in recent weeks as the crypto industry has plunged.
• The company faces additional selling pressures amid speculation that it could be delisted from MSCI indices.
• While these factors promote short-term volatility, investors believing in Bitcoin’s long-term trajectory might see an opportunity to buy, as Strategy’s fundamental strengths and approach remain unchanged.

Shares of Strategy Inc. (NASDAQ: MSTR), formerly known as MicroStrategy, have fallen 43% year-to-date (YTD), with a substantial portion of that decline occurring in the last month.

The company’s shift from a software firm toward acting as a Bitcoin treasury in recent years has produced sharply divided views on the stock.

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As Strategy has accumulated hundreds of thousands of BTC, speculation has grown that the Morgan Stanley Capital International (MSCI) indices may remove MSTR because of its heavy crypto exposure. 

Capital outflows, crypto volatility, and concerns that Strategy has departed from its core software business have made many investors cautious.

Short interest in MSTR stock has risen nearly 9% in the past month, reflecting that skepticism. Further, multiple analysts lowered their price targets for MSTR after its late-October earnings report. Still, both crypto bulls and investors who believe in Strategy’s software business view the volatility as a potential entry point for high-risk, high-reward portfolios.

The Risks and Possibilities of a Leveraged Bitcoin Strategy

In recent years, Strategy moved to a leveraged Bitcoin acquisition model, using cash reserves and issuing preferred stock to fund purchases of more than 600,000 BTC since 2020. The company holds those Bitcoin on its balance sheet while continuing to operate its analytics software business.

There are clear risks to allocating billions of dollars to cryptocurrency—risks that were underscored recently as a multi-month Bitcoin rally reversed and prices fell below $90,000 for the first time since April. Still, proponents point to Strategy’s hybrid approach: unlike some companies that fully transformed into Bitcoin treasuries, Strategy has retained a core business that can act as a buffer against crypto swings.

Some investors view MSTR as offering asymmetric upside because of that dual exposure—during crypto upcycles, the stock could potentially amplify gains relative to BTC thanks to its leverage and operating business.

The Impact—Or Lack Thereof—From MSCI Delisting

One factor driving recent selling is the rumor that MSCI might remove MSTR from its indices due to the company’s Bitcoin exposure. A delisting would likely increase short-term volatility as ETFs, mutual funds and institutional investors rebalance away from MSTR.

However, a delisting would be a market-structure issue rather than a change to Strategy’s underlying business: it would not alter the company’s Bitcoin accumulation model or its software operations. If fear pushes MSTR’s price below the value implied by its Bitcoin holdings, the stock could present a relative value opportunity.

Shoring Up Against Bitcoin Volatility

To address concerns about holding billions in BTC, Strategy recently announced the establishment of a $1.44 billion USD reserve to support preferred-share dividend distributions and debt costs.

While the move did not immediately reverse the selloff, it should reassure cautious investors that the company can maintain current dividend levels for up to two years. That said, continued focus on Bitcoin keeps Strategy exposed to cryptocurrency risk.

Investors who are bullish on Bitcoin’s longer-term trajectory and willing to accept short-term volatility may see the recent pullback—and any further turbulence tied to delisting talk—as an opportunity to buy while both the shares and BTC are down.

As disruptive as a delisting could be, it would be a technical challenge rather than a change to Strategy’s fundamentals. Some analysts still project a sizable rebound for the company despite these headwinds.

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