Analysts at TD Cowen have indicated that Strategy’s stock may experience ongoing pressure as a result of an imminent MSCI review.

The firm anticipates that Public Bitcoin Companies (PBTCs), including Strategy, could be removed from all MSCI indexes in February. A formal decision is expected around mid-January.

Cowen has characterized the potential removal as “capricious,” advising investors to brace for continued selling pressure. The analysts highlight that Strategy operates as a public company rather than a fund, trust, or holding company, and that its $500 million software business is the sole source of its revenue.

In addition, the company’s Bitcoin treasury operations are marked by innovation and activity, offering distinctive Bitcoin-backed securities.

“The decision to exclude Strategy from broad indexes, solely due to its Bitcoin focus, seems arbitrary,” the analysts stated. They have raised concerns about whether MSCI’s rationale is influenced by a bias against cryptocurrencies, rather than adherence to strict classification criteria. MSCI has expressed apprehensions regarding the similarity of PBTCs to investment funds, which are ineligible for index inclusion.

Cowen contends that Strategy’s structure is distinctly different.

Strategy and Potential MSCI Exclusion

The ramifications of this situation are significant. JPMorgan has recently cautioned that Strategy’s exclusion from MSCI could lead to passive outflows totaling $2.8 billion. Should other indexes follow suit, the potential total could reach $8.8 billion. Currently, Strategy’s market capitalization hovers around $59 billion, with approximately $9 billion allocated in passive index-tracking vehicles.

JPMorgan has argued that any forced selling could further depress an already weakened share price.

In recent months, Strategy’s shares have shown a greater decline than Bitcoin itself. The company’s market net asset value (mNAV) — the ratio of market value to Bitcoin holdings — has fallen to just above 1.1, marking its lowest point since the pandemic’s onset. The stock price has dropped over 60% since last November, with preferred shares and bond issuances also experiencing notable sell-offs.

Despite this volatility, Cowen has maintained a consistently bullish long-term outlook. The bank estimates that the company could amass 815,000 BTC by 2027, suggesting that intrinsic Bitcoin value per share could support a price target of $585, implying approximately 170% upside from current levels.

The recent stock weakness is attributed by Cowen to market volatility and fears associated with index inclusion, rather than any shortcomings in Strategy’s core accumulation model.

Michael Saylor, Strategy’s chairman, has downplayed index-related concerns. In a recent statement, he reiterated that the company functions as a fully operational business, with active software and Bitcoin-backed credit programs. Saylor has frequently underscored its innovative financial products, including structured Bitcoin credit instruments such as $STRK and $STRC, which offer yields surpassing those in conventional credit markets.

Saylor envisions the company accumulating $1 trillion in Bitcoin and achieving annual growth of 20–30%, leveraging long-term value appreciation to create a substantial reserve of digital collateral.

From this foundation, Saylor intends to issue Bitcoin-backed credit at yields significantly higher than those in traditional fiat systems, potentially exceeding corporate or sovereign debt yields by 2–4%, thereby providing safer, over-collateralized alternatives.

Saylor believes that other large-scale traditional financial institutions could adopt the Strategy model within their income frameworks.

Cowen has also highlighted potential favorable developments. Inclusion in the S&P 500 could expand institutional ownership and stabilize stock flows. Furthermore, additional regulatory clarity surrounding Bitcoin could enhance investor confidence.

Strategy’s trajectory underscores the increasing significance of Bitcoin within global finance. Historically, its inclusion in indexes such as the Nasdaq 100 and MSCI benchmarks has facilitated crypto exposure in mainstream investment portfolios.

While Cowen suggests that MSCI’s potential exclusion of the company may lead to short-term market disruptions, the long-term adoption trends remain unaffected.

Bitcoin itself has encountered challenges over the past month, declining from an October high of over $126,000 to around $88,000. Nevertheless, Strategy continues to execute substantial Bitcoin purchases, now holding over 3% of the total supply.

Bitcoin advocates are urged to maintain the price above $84,000 following last week’s closing price. Should it fall below this threshold, weak support is observed near $75,000, with stronger buying anticipated in the $72,000–$69,000 range. A more significant drop would target the “$58k gang” area around the 0.618 Fibonacci level at $57,700.

MSTR has seen an increase of over 4% today, trading at $177.47.

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