MicroStrategy Valuation Under Pressure Amid Bitcoin Price Decline

The valuation of MicroStrategy(MSTR) is under serious re-evaluation as Bitcoin tumbles on the market. This has invited renewed caution from index providers as a harsh spotlight is being cast on MSCI-led index delisting risks of MSTR.

It seems that what made MSTR appealing to investors is the core factor that is driving the company towards a devaluation and consequent delisting from major exchanges. In this article, we will take a look at why MicroStrategy’s valuation is under threat and why, as investors, you should be worried.

The Foundations Shake as Bitcoin Prices Drop

MicroStrategy has an immense reserve of Bitcoin, and the company’s valuation is tethered to the ever-volatile landscape of Bitcoin. As of late 2025, MicroStrategy has over 640,000 BTC in its reserve, a factor that has raised much criticism from traditional investors.

With Bitcoin making an epic tumble from its October high of $126,000, MicroStrategy is under pressure as MSTR’s asset base is under dramatic threat. Since each $1000 price variation can effectively translate into millions of dollars in book value swings, the firm’s stock is being viewed as highly leveraged and volatile, as a proxy for Bitcoin itself.

In essence, the market implied Net Asset Value (mNAV) has collapsed for MSTR. The stock, which once traded for premium values, is now under severe threat of devaluation and delisting.

Institutional Reassessment of MSTR

Institutional investors who once considered MSTR as a high-beta Bitcoin proxy are now rethinking their choices. One of the major reasons behind this thought is the introduction of better-positioned and regulated Bitcoin assets like the spot Bitcoin ETFs. As investors can now safely gain exposure to the price of BTC, many are pulling away from MSTR, leaving the stock in shambles.

With its debt-heavy, equity-diluted model and continuing accumulation of BTC, MSTR seems to be losing grip on its investors, who are getting increasingly disturbed about the company’s business model.

Even though MicroStrategy operates software-based products, the stock’s core is Bitcoin, which has suffered many losses from the recent Bitcoin tumble on the market. What was once predicted as a breakthrough for MicroStrategy has become a nightmare for its investors.

Index Warnings and the Risks of Forced Selling

Beyond the threats of Bitcoin’s price volatility and dilution, a structural threat has emerged for MSTR. This threat comes from index providers who now think that Bitcoin-heavy firms like MicroStrategy may not be an ideal asset in the portfolio of traditional finance.

JPMorgan Chase & Co. had warned MicroStrategy of a possible delisting from MSCI USA in November of 2025. Such a warning from a respected firm in traditional finance is not to be taken lightly. Investors seem to share the same idea, as MSTR has seen an immense drop since the warning was issued by JPMorgan.

There is a proper and rational analysis behind these warnings and news, as MSTR now holds more than half of its assets in Bitcoin. This makes the company increasingly look like an investment fund rather than a traditional company with an inherent value of its own.

The delisting comes with the risk of forced selling of nearly 9 billion US dollar worth of MSTR stocks. JPMorgan estimates that the initial outflows from MSCI USA funds alone would cost approximately 2.8 billion US dollars. If this leads to a broader multi-index exodus for MSTR, the loss of funds could reach anywhere from 8.8 to 11.2 billion US dollars.

Also Read: Bitcoin Falls Below $86K as Crypto Market Drops on BOJ Rate Hike Fears, Yearn $9M Exploit

What Does This Mean for Valuation?

With pressure mounting from two sides, Bitcoin’s volatility and index delisting threat, the valuation of MSTR now looks far less attractive. Traditional investors have started to classify MSTR as just a wrapper around Bitcoin.

In a downside scenario, if Bitcoin were to tumble further, say to $70,000 or so, or the company fails to maintain its index status, MSTR could see its implied value shrink further. On the other hand, if Bitcoin were to make a strong comeback, there remains an upside potential; however, the window for outsized gains now seems like a slim chance, which might add fuel to the vehicle that is carrying investors away from MSTR.

Conclusion

Investor confidence in Microstrategy is clearly shaken. With the collapse of its NAV Premium, concerns about dilution, and fear of forced selling from passive funds have all contributed to the downfall of MSTR, and investors, both retail and institutional, are now rethinking their choice of selecting MSTR to realize outsized gains.

However, MicroStrategy’s leadership still remains defiant to these arguments and the situation. The public statements produced by the upper management continue to hold a HODL sentiment for MSTR’s strategy linked with Bitcoin accumulation.

Under this crisis, MSTR seems to be doubling down on Bitcoin rather than backing up. Whether the conviction will hold up under mounting pressure, or will investors see MSTR as a high-risk stock is something that we will have to wait and see.

Also Read: Elon Musk Predicts Energy Will Replace Currency and Endorses Universal High Income