The investment thesis behind MicroStrategy, long celebrated as a corporate Bitcoin pioneer, is facing its most severe test. Monday’s trading session witnessed substantial selling pressure on the software company’s stock, which plummeted nearly 4% at its lowest point, extending a brutal multi-week downtrend. This decline coincides with a sharp correction in Bitcoin, which has retreated from its record highs to the $83,000-$86,000 range. For a firm that has staked its entire corporate strategy on the cryptocurrency, the timing could hardly be worse, raising existential questions about its foundational business model.
The Unraveling of a Premium
At the heart of the current crisis is the dramatic implosion of MicroStrategy’s NAV premium. This metric represents the additional value investors are willing to pay for the company’s shares above the straightforward value of the Bitcoin it holds on its balance sheet. This premium has collapsed from a comfortable 2.5x in December 2024 to a meager 1.16x by late November 2025. This erosion signals a fundamental loss of market confidence in CEO Michael Saylor’s strategy of using debt and equity to accumulate Bitcoin. The financial leverage that once amplified gains during the bull market is now working decisively in reverse.
Major Investors Head for the Exits
Compounding the problem, reports from November 24 confirm that institutional heavyweights, including BlackRock, have significantly scaled back their positions in MicroStrategy. This institutional flight did not occur in a vacuum. Previously, JPMorgan divested 25% of its stake, citing official concerns over the “regulatory risks” associated with Bitcoin-heavy companies. A domino effect now appears to be in full swing, with large-scale investors withdrawing their support.
Should investors sell immediately? Or is it worth buying Strategy?
Core Holdings Under Pressure
The company’s vulnerability is directly tied to its massive Bitcoin treasury, which now holds nearly 650,000 coins. The recent price drop from a peak of $126,000 inflicts a substantial paper loss on its primary asset. While MicroStrategy demonstrated continued conviction with a purchase of 8,178 Bitcoin for $835.6 million on November 17, the overall acquisition pace has notably slowed, with only approximately 9,000 BTC added throughout the entire month. Market experts are now questioning whether the aggressive, leverage-fueled acquisition strategy is sustainable in a high-interest-rate environment without inviting dangerous margin calls.
From All-Time Highs to a Technical Breakdown
The contrast with recent performance is stark. Just one year ago, in November 2024, the stock reached an all-time high of $543 per share. Since that peak, it has surrendered approximately 60% of its value. The recent emergence of a technical “Death Cross” pattern on its charts has further confirmed the bearish trend, frightening away the last of the optimistic retail investors.
A potentially more severe threat looms on January 15, 2026. On this date, index provider MSCI will decide whether to exclude Bitcoin-concentrated companies like MicroStrategy from major stock indices. A negative decision would compel passive index funds to liquidate their holdings, dealing a potential death blow to the already beleaguered stock. In response to these mounting risks, analysts have been downgrading the stock en masse to “Hold” or “Sell” ratings and slashing their price targets. The next critical technical support level is seen at $150, a threshold that may be breached sooner than anticipated.
Ad
Strategy Stock: Buy or Sell?! New Strategy Analysis from February 7 delivers the answer:
The latest Strategy figures speak for themselves: Urgent action needed for Strategy investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 7.
Strategy: Buy or sell? Read more here...
