Strategy's stock is currently under significant pressure stemming from an impending review by MSCI, which analysts at TD Cowen anticipate will lead to the removal of public Bitcoin treasury companies (PBTCs), including Strategy, from all MSCI indexes this February. A formal decision regarding this exclusion is expected around mid-January. While Cowen characterized the potential removal as "capricious" and "arbitrary," underscoring that investors should prepare for sustained selling pressure, they critically question MSCI’s rationale, suggesting it may reflect a bias against crypto rather than strict classification criteria. Cowen emphasizes that Strategy is distinctly a public operating company, not a fund, trust, or holding company, with its $500 million software business generating all its revenue, alongside innovative and active Bitcoin treasury operations that offer unique Bitcoin-backed securities. MSCI, conversely, has expressed concerns that PBTCs might resemble investment funds, which are typically ineligible for index inclusion, a contention Cowen actively disputes given Strategy’s clearly differentiated corporate structure.

The financial implications of such an exclusion are substantial. JPMorgan has issued a stern warning, projecting that Strategy’s removal from MSCI indexes could trigger approximately $2.8 billion in passive outflows. Should other major indexes follow suit, the total capital exodus could escalate to a staggering $8.8 billion. With Strategy's market capitalization presently hovering near $59 billion and roughly $9 billion of its shares held in passive index-tracking vehicles, any forced selling could severely exacerbate an already depressed share price. Strategy's shares have notably underperformed Bitcoin in recent months, witnessing a decline of over 60% since last November. The company’s market value to Bitcoin holdings ratio (mNAV) has fallen to just above 1.1, marking its lowest point since the pandemic, with preferred shares and bond issuances also experiencing sharp sell-offs.

Despite the current volatility and anticipated short-term challenges, TD Cowen maintains a robust bullish long-term outlook for Strategy. The bank projects that the company could amass an impressive 815,000 BTC by 2027. At this level, the intrinsic Bitcoin value per share is estimated to support a price target of $585, implying an upside of approximately 170% from current levels. Cowen attributes the recent market weakness primarily to broader market volatility and index-related fears, rather than any fundamental failure of Strategy’s core Bitcoin accumulation model.

Michael Saylor, Strategy’s chairman, has publicly dismissed the index concerns, reiterating that the company functions as a fully operating business, actively engaged in both its software division and innovative Bitcoin-backed credit programs. Saylor has consistently highlighted Strategy's advanced financial products, including structured Bitcoin credit instruments like $STRK and $STRC, which are designed to offer yields superior to traditional credit markets. His ambitious vision includes accumulating $1 trillion in Bitcoin and achieving annual company growth of 20–30%, leveraging Bitcoin's long-term appreciation to establish a massive pool of digital collateral. From this substantial base, Saylor plans to issue Bitcoin-backed credit at yields significantly higher than those available in traditional fiat systems, potentially 2–4% above corporate or sovereign debt, thereby offering safer, over-collateralized alternatives. Saylor also believes that this innovative model can be adopted by other large traditional finance companies to manage their income and assets.

Looking ahead, Cowen identifies several potential tailwinds that could support Strategy’s future performance. A possible inclusion in the S&P 500 index could significantly broaden institutional ownership and introduce greater stability to the stock's flow. Furthermore, enhanced regulatory clarity surrounding Bitcoin is expected to bolster overall investor confidence. Strategy’s journey underscores the evolving and increasingly significant role of Bitcoin in global finance, with its historical inclusion in indexes such as the Nasdaq 100 and various MSCI benchmarks having previously channeled crypto exposure into mainstream portfolios. While MSCI's potential exclusion might trigger short-term market disruption, Cowen asserts that the overarching long-term adoption trends for Bitcoin and digital assets remain firmly intact.

In the broader cryptocurrency market, Bitcoin itself has experienced a period of struggle over the past month, declining from an October high above $126,000 to approximately $88,000 recently. Despite this market sell-off, Strategy has continued its strategy of executing large Bitcoin purchases, now holding more than 3% of the total Bitcoin supply. For Bitcoin bulls, maintaining the price above $84,000 after last week’s close is crucial. Should it fall, weak support is anticipated near $75,000, with stronger buying activity likely to emerge in the $72,000–$69,000 zone. A more significant drop could target the "58k gang" area, correlating with the 0.618 Fibonacci level at $57,700. As of current trading, MSTR shares are up over 4% today, trading at $177.47.