Michael Saylor’s MSTR Faces $2.8B Hit as Crypto Crash Deepens
MicroStrategy, the firm led by Michael Saylor, is under the microscope as MSCI and Nasdaq weigh whether the company even qualifies...
Quick overview
- MicroStrategy is facing scrutiny from MSCI and Nasdaq regarding its eligibility for major indexes due to its significant cryptocurrency holdings.
- If excluded, the company could see a $2.8 billion outflow from index-tracking funds and $9 billion in losses for passive funds.
- The ongoing crypto downturn has severely impacted MicroStrategy's stock, which has dropped over 60% since its all-time high in November.
- Despite market challenges, CEO Michael Saylor remains optimistic about the company's ability to withstand Bitcoin's volatility and continues to pursue a long-term strategy of accumulating Bitcoin.
MicroStrategy, the firm led by Michael Saylor, is under the microscope as MSCI and Nasdaq weigh whether the company even qualifies for inclusion in their major indexes. Getting included in these indexes is a big deal because it brings a company visibility and liquidity, and that’s a huge benchmark for companies that live and die by the stock market.
MSCI is currently talking to investors about whether companies with more than half their assets parked in digital currencies should even be allowed in broad-market indexes. This has led institutions to view these firms more like investment funds than just run-of-the-mill operating businesses, sparking debate over whether they should be included. We should know what happens by January 15th, 2025.
If they get dropped from the indexes, you can expect
- A pretty big $2.8 billion outflow from index-tracking funds.
- Passive funds might face $9 billion in losses across the board.
- JPMorgan thinks this could even reduce investor liquidity and long-term demand for the stock.
BREAKING 🚨
Michael Saylor's $MSTR could be DELISTED from the Nasdaq 100 and MSCI USA. ⚠️
JPMorgan analysts cite a high risk of reclassification from "Tech" to "Financial" due to the company's Bitcoin strategy.
Billions in passive outflows threatened. 😳 pic.twitter.com/FWjXnaimK9
— Karan Singh Arora (@thisisksa) November 21, 2025
Many analysts had thought MicroStrategy might actually make it into the S&P 500, but the ongoing debate shows how investor sentiment is shifting against companies heavily invested in cryptocurrencies.
Crypto Downturn Proves a Nightmare for Microstrategy
The ongoing crypto crash has effectively crushed Microstrategy’s stock performance. Since November, when its shares hit an all-time high, MSTR stock has plummeted by more than 60%, wiping out the premium that once lured institutional investors.
The downturn has also had an impact on some newer financing tools
- The value of perpetual preferred shares has dropped sharply.
- Euro-denominated offerings issued relatively recently are now trading below their initial discounts.
Bitcoin, the company’s main asset, has tumbled 32% from its October high, wiping out more than a trillion dollars from the total crypto market cap. As a result, the mNAV of Microstrategy has taken a dive, and the boost in valuation it had before is now gone.
Saylor Defends His Firm Amid Market Mayhem
Despite the market chaos, Michael Saylor remains confident. He says that MicroStrategy’s structure is designed to withstand even extreme fluctuations in Bitcoin’s value without posing any existential threat to the company.
At this point, after over five years and more than $48 billion spent buying Bitcoin, $MSTR now has total paper profits of less than 17%. Had Saylor bought just about any other asset, MSTR would have been better off. Plus, if Saylor ever tries to realize this gain, it will vanish.
— Peter Schiff (@PeterSchiff) November 21, 2025
Some key points he’s been making lately:
- His firm can withstand an 80-90% drawdown in Bitcoin’s value.
- The company’s operations are insulated from the ups and downs of the crypto market.
- His long-term strategy is still all about buying up more Bitcoin and holding on tight.
The whole situation is now putting the investor confidence and the firm’s place in high-profile equity benchmarks to the test. For now, Microstrategy is a classic example of how the world of traditional equities intersects with the wild world of cryptocurrency.
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