MicroStrategy ($MSTR): Down 68% Amid Bitcoin's 33% Dip

$MSTR has experienced a sharp 68% decline, far outpacing Bitcoin's ($BTC) 33% drop, raising alarms in the market.

Speculation is rife about potential removal from Nasdaq 100 index and MSCI USA indices, which could spark an estimated $2.8B in outflows from MSCI alone.

With ~$9B of its market cap tied to passive investments like ETFs, this could amplify volatility.

Yet, even post-decline, $MSTR trades at a 1.00x multiple to modified net asset value (mNAV)

Recall the 2022 bear market: It traded below mNAV, creating a discount to its Bitcoin holdings.

Market Watch: Speculation Rises Over MSTR’s Potential Index Removal

Speculation is heating up around MicroStrategy (MSTR) as investors brace for the possibility that the stock could be removed from the Nasdaq-100 and MSCI USA indices.

If the delisting from the MSCI USA index materializes, analysts estimate that the move alone could trigger around $2.8 billion in passive outflows, mainly from funds that mirror MSCI benchmarks.

And that’s only part of the ripple effect.

Roughly $9 billion of MSTR’s total market cap is currently tied up in passive strategies such as ETFs and index-linked products. Any forced rebalancing by these funds could introduce sharp, short-term volatility—a familiar pattern for stocks heavily owned by passive vehicles.

Yet here’s the interesting twist:

Even after the recent pullback, MSTR is still trading almost exactly at 1.00× its modified net asset value (mNAV). In simple terms, the market is pricing the company nearly equal to the value of its Bitcoin holdings and adjusted assets.

We’ve seen this story before.

During the 2022 crypto bear market, MicroStrategy actually traded below its mNAV—creating a rare discount where the stock was valued less than its underlying Bitcoin holdings. That discount eventually corrected as sentiment improved.

Today’s setup is different, but the themes rhyme:

High passive ownership, big index implications, and a price tightly hugging mNAV. Traders now wait to see whether the index committees confirm any changes—and how the market reacts if billions in passive flows suddenly turn into selling pressure.

For now, MSTR sits in a fragile balance between fundamentals, Bitcoin sentiment, and mechanical flows that could swing its price sharply in the weeks ahead.