MSTR Under Pressure: TD Cowen Flags Bitcoin Premium Drop, Possible MSCI Removal

Analysts at TD Cowen, an American multinational investment bank and financial services firm, say that Strategy’s MSTR stock is now heading towards lows last seen during the 2021-2022 “crypto winter”.

The bitcoin treasury giant, formerly called MicroStrategy and co-founded by Michael Saylor, is facing increased pressure as it could be removed from all MSCI indexes by February 2026. MSCI Inc., an index firm owned by JPMorgan Chase, provides indices that track the performance of specific groups of stock across countries, regions, and sectors, serving as benchmarks for global equity markets.

Strategy Pauses BTC Purchases as MSTR Falls to 14-week Low Amid Bitcoin’s Price Decline

Strategy typically begins each week by highlighting the amount of fresh bitcoins it has added to its growing treasury stockpile; however, the company was silent on Monday.

Lance Vitanza, managing director at TDSecurities, noted that the world’s largest digital asset treasury company (DAT) paused BTC buys for the first time in several weeks, as its stock price hovered near a 14-week low.

In an email to various crypto media outlets, Vitanza highlighted that Strategy did not issue any common stocks or preferred shares under its at-the-market (ATM) programs, nor did it purchase any new bitcoin on Monday. 

He also shared two charts that showed Strategy’s bitcoin-premium – the price investors pay for the stock (MSTR) relative to the net asset value of its bitcoin holdings – dropping sharply from the peaks seen at the end of 2024. The premium narrows when MSTR trades closer to the value of the company’s BTC stockpile, and when investors treat MSTR as a leveraged way to gain bitcoin exposure, it widens.

Both charts, one that goes all the way back to August 2020, when Strategy first accumulated bitcoin for its treasury, and another covering the previous 12 months, reveal that its bitcoin-premium is compressing steadily towards the late-2021 and early-200 levels.

According to Yahoo Finance data, MSTR rose 5% to close at $179 on Friday; however, the stock has fallen by 38% over the past 30 days as bitcoin’s price retreated from its early-October all-time high of $126,198 to $80,600 last week – marking a 38% drawdown. Meanwhile, Strategy’s shares are down 67% from last year’s peak of $543.

Last Monday, Strategy announced one of its largest single-day bitcoin purchases, adding 8,178 BTC to its coffers. The buy was made for a total of $835.6 million, at an average price of $102,171 per BTC, between November 10 and 16. This transaction brought the company’s total bitcoin holdings to 649,870 BTC, with an average cost basis of $74,433 per coin. 

The $835 million BTC purchase was funded primarily by the $716.8 million gross proceeds from its euro-denominated STRE preferred, with another $131.4 million coming from ATM sales of STRF, STRC, and STRK preferred shares.

Strategy didn’t make any bitcoin purchases at the beginning of October; however, that pause aligned with ones that occurred around the end of the preceding two fiscal quarters – Q2 and Q3 2025.

TD Cowen Questions “Capricious” MSCI Expulsion as Pressure Mounts on MSTR

In a separate report, Vitanza acknowledged the concerns surrounding Strategy’s potential removal from MSCI indices in February. Vitanza and his colleague Jonnathan Navarette called the move “capricious,” but expect the index firm to go ahead with the decision, suggesting that the risk has weighed heavily on MSTR.

MSCI announced in October that it is in discussions with the investment community on whether to exclude digital asset treasuries (DATs) and companies that have a balance sheet with more than 50% in crypto assets from its indexes. A preliminary list of 38 companies, including Strategy, Metaplanet, Riot Platforms, and MARA Holdings, has been released by the index firm.

The stakes are higher than ever. Last week, JPMorgan analysts warned that excluding Strategy from MSCI indices could trigger $2.8 billion in outflows from MSTR, and if other index providers follow suit, that number could go as high as $8.8 billion. 

The company’s market cap currently sits near $59 billion, with roughly $9 billion of the total held in passive index-tracking vehicles.

MSCI has flagged DATs as investment funds, which aren’t eligible for inclusion in its indices. TD Cowen’s report called the decision “misguided” and “unfortunate,” questioning the firm’s classification of MSTR as an investment fund.

Vitanza said Strategy is neither a fund, a trust, nor a holding company; instead, it is a publicly-traded operating company with a $500 million software business that generates all of its revenue and a unique treasury strategy that uses bitcoin as “productive capital,” echoing Saylor’s arguments.

He warned that Strategy’s removal from MSCI indices would trigger “substantial selling” of MSTR common shares at a time the company is already trading at “steeply depressed levels.” Vitanza also noted that ultimately, the move may prove to be nothing more than an “unfortunate speed bump on the road” for MSTR.

Earlier this month, Strategy’s mNAV – ratio of market cap to bitcoin holdings – dropped to 1.1, its lowest level since 2020. This is what prevented the company from growing its bitcoin stockpile by issuing common stock or preferred shares, as it normally does.

As MSTR became less lucrative to investors this year, the company pivoted to dividend-offering preferred shares, such as STRK, STRF, STRC, and STRE, which allowed it to raise hundreds and billions of dollars in capital to buy more BTC.

MSTR Could Hit $585 Bitcoin Value by 2027, With 800,000 BTC Goal: TD Cowen

Despite the volatility and continued premium decline, TD Cowen maintains a bullish long-term outlook on Strategy. 

Vintanza and Navarrete estimate that if the company can maintain its bitcoin buy rate, then it could be holding 815,000 BTC by 2027. At that level, the bitcoin per MSTR value could propel the stock to $585, which is roughly 180% above its current price of $179.04. The analysts see this as a reasonable outcome in a year’s time.

TD Cowen attributes the recent weakness to market volatility and index exclusion-related fears, rather than a failure of Strategy’s core operational and bitcoin accumulation model. Vitanza and Navarete called the MSCI decision a bias against Strategy and Bitcoin, predicting that the stock will outperform to the extent of BTC’s price recovery.

The investment bank concluded its report by arguing that, regardless of MSCI policy change, Strategy continues to stack bitcoin faster than its corresponding liabilities, and MSTR should necessarily trade at a premium to the value of its underlying holdings if BTC becomes increasingly integrated into global finance.

At the time of writing, Bitcoin (BTC) is trading at $87,657 – up 0.80% in 24 hours.

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