Company's Approach to Bitcoin
Strategy, the company formerly known as MicroStrategy, has signaled its intent to potentially increase its Bitcoin holdings, even as the cryptocurrency market continues to face significant downturns. In a recent post on X, the company reminded investors of its strategic approach from 2022, hinting that it may take advantage of current market conditions to further expand its Bitcoin position.
The move follows a series of similar actions by Strategy in the past when it seized on market weaknesses to grow its cryptocurrency portfolio.
Michael Saylor, the CEO of Strategy, made it clear that the company’s approach to Bitcoin is not a typical investment strategy. Instead, he emphasized that the firm should not be seen as a Bitcoin fund but as a publicly traded operating company. He further clarified that Bitcoin forms part of a “unique treasury strategy” that positions the cryptocurrency as productive capital within their business framework.
According to Saylor, Strategy has a diversified portfolio that includes a $500 million software business, alongside its Bitcoin-backed financial innovations.
In the depths of the 2022 crypto winter, our average cost basis was $30K while $BTC traded nearly 50% below it at $16K. What did we do? We bought more.
Navigating Potential Market Shifts
While Strategy’s Bitcoin holdings have drawn attention, concerns remain over its status in major market indices. The company is currently included in several key benchmarks, such as the Nasdaq-100, MSCI USA, and MSCI World. According to analysts, these index inclusions represent approximately $9 billion of Strategy’s $50 billion market cap, with passive funds tracking these indices.
Should MSCI decide to remove Strategy from its equity indices, as predicted by JPMorgan, the company could face up to $2.8 billion in outflows. Moreover, the broader reclassification by other index providers could add another $8.8 billion in redemptions, significantly affecting its stock performance.
Despite these challenges, Strategy has remained resilient. This year, the company completed five public offerings totaling $7.7 billion in digital credit securities, underscoring its commitment to innovate within capital markets while leveraging Bitcoin as part of its operational strategy.
As Bitcoin prices continue to fluctuate, with the cryptocurrency recently falling to a seven-month low near the $80,000 mark, Strategy is poised to take a strategic position. If the price of Bitcoin rebounds, the company’s strategy of using Bitcoin as a productive capital could pay off handsomely.
Analysts will be closely watching how Strategy navigates these complexities, especially with the MSCI decision expected in January 2026. The company’s approach to Bitcoin, amidst ongoing market volatility, will be a critical factor in its future financial performance.