Strategy Stock Hits Its Hardest Wall Since 2020’s Treasury Pivot as JPMorgan Flags Risk of Benchmark Removal

Strategy stock has plunged 68% from last year’s peak as Bitcoin’s slide accelerates and JPMorgan warns the company now risks being dropped from major equity indexes.

One year ago, Strategy (MSTR) touched a record high of $543. Bitcoin was nearing $100,000 for the first time and the company’s aggressive treasury strategy looked unstoppable. Fast forward twelve months, and the landscape is unrecognizable.

Strategy now trades 68% below that peak. Bitcoin has fallen from October’s $126,000 high to $83,142, and hit $81,385 on Coinbase at the low. Traders are now watching one number more than any other: Strategy’s average Bitcoin purchase price of roughly $74,430.

As Bitcoin sinks deeper into the $80,000 range, Strategy is slipping below major moving averages and technical support levels. The current drawdown ranks alongside the worst periods since the company pivoted into a Bitcoin-first treasury model in 2020.

Strategy Revisits Pain From Earlier Bitcoin Cycles

The recent slump mirrors the 69% slide between February and May 2021, when Bitcoin collapsed from $60,000 to $30,000. The only deeper fall came after Bitcoin’s November 2021 high at $69,000, when Strategy plunged 84% before bottoming in June 2022.

Since adopting its Bitcoin strategy in 2020, the stock has suffered multiple drops of more than 50%. The pattern is clear. When Bitcoin breaks, Strategy moves even harder, and the volatility cuts both ways.

The problem now is that Bitcoin’s current decline follows months of optimism, making the reversal sharper and sentiment more fragile.

Strategy Risks Losing Its Spot in Major Indexes

JPMorgan (JPM) analysts now warn that Strategy could be removed from major benchmarks such as MSCI USA and the Nasdaq 100 (NDX). If that happens, index-tracking funds would be forced to sell. JPMorgan estimates that MSCI-linked outflows alone could reach $2.8 billion.

Passive vehicles currently hold roughly $9 billion of Strategy’s market cap. Any benchmark exclusion would strip away a major layer of automatic demand, putting more pressure on a stock already battling a deep technical breakdown.

Strategy Still Trades Above mNAV, but the Cushion Is Shrinking

Even with the latest decline, Strategy trades at a 1.23 multiple to its market net asset value. During the 2022 bear market, the stock often traded below mNAV, giving investors a rare discount to the underlying Bitcoin.

This discount has not reappeared yet. But if Bitcoin keeps falling, the gap between price and mNAV could tighten quickly.

Is Strategy a Good Stock to Buy?

Strategy continues to draw strong backing from Wall Street. 14 analysts have issued ratings over the past three months, and the group leans heavily positive, with 12 Buy calls and 2 Hold ratings.

The average 12-month MSTR price target sits at $524.08, suggesting 196% upside from the latest price.

See more MSTR analyst ratings