MSTR at a turning point: when are billionaire funds betting on this asset? Three questions that determine the future of the stock

While the Strategy stock price experienced volatile swings, an increasing number of institutional players are entering the market. Hedge fund Point72 managed by Steve Cohen and the Korean National Pension Service are significantly increasing their positions, suggesting that despite current difficulties, the long-term potential of Strategy attracts serious capital. This time, we will analyze three key issues influencing investor decisions.

The Bright and Dark Sides of Strategy: Paper Fortune but Market Challenges

The current financial situation of Strategy appears solid on paper. According to on-chain monitoring, Strategy holds 671,268 bitcoins worth a total of $60.441 billion, with an average cost of $74,972. Unrealized gains reach $10.114 billion. Since the beginning of the year, the return on bitcoin has been 24.9%, clearly demonstrating the cryptocurrency reserve potential.

However, market dynamics look different. Strategy shares have fallen 12% compared to a 16% increase in the S&P 500 index. In contrast, French company The Blockchain Group has seen a 164% rise, while Nakamoto – a company that raised over $600 million to buy bitcoins – has lost over 98% of its market capitalization. This asymmetry indicates deep discrepancies between digital asset valuations and overall market sentiment.

MSCI Confusion: How Index Decisions Could Change the Game

In October, MSCI proposed excluding companies from global indices if their digital assets account for over 50% of total assets. MSCI believes such entities resemble investment funds more than traditional operating companies. Strategy strongly protested, arguing that such a move would contradict US government policies supporting digital innovation and cause confusion among indices.

The gap between the parties is significant. According to JPMorgan analysts, if Strategy is removed from MSCI, passive funds may be forced to sell shares worth up to $2.8 billion. Broader estimates by the “BitcoinForCorporations” group suggest that the total capital outflow from the sector could range from $10 billion to $15 billion.

The decision is scheduled for January 15 next year. Meanwhile, Nasdaq 100 kept Strategy in its index in December, but other benchmarks may follow MSCI. This uncertainty remains a primary catalyst for price declines.

Who is Buying MSTR and Why Is It Important?

Despite declines, hedge funds and public institutions have not withdrawn from MSTR.

On December 17, hedge fund Point72 Asset Management, managed by billionaire Steve Cohen, bought 390,666 Strategy shares worth about $65 million. This was a clear signal of confidence in the long-term prospects.

Even more surprising was the move by Korean National Pension Service (NPS), managing assets worth $1 trillion. In December, the fund increased its holdings in Strategy to $93 million. As major players in the institutional market strengthen their positions, it’s worth wondering what they know.

The daily trading volume of Strategy has already surpassed that of giant JPMorgan, indicating intense market interest.

Survival Capacity: Earning Without Selling Bitcoin

Strategy recently raised $748 million through common stock issuance, increasing cash reserves to $2.19 billion. According to TD Cowen analysts, the company’s annual obligations in interest and dividends amount to about $824 million.

This cash reserve means that Strategy can fund its operations and pay dividends without selling bitcoins worth $61 billion for several more years. This strategy prepares the company for scenarios where the stock price falls below net asset value – a situation Strategy has experienced in previous downturn cycles.

Final Deadline: January 15 as a Turning Point

While Citi lowered the target price of Strategy shares from $485 to $325, the bank maintained a “buy” recommendation, indicating long-term institutional confidence in MSTR’s potential. The MSCI decision scheduled for January 15 could be a pivotal moment.

If Strategy remains in the indices, it could trigger a new wave of passive fund interest. If excluded, a period of instability awaits, although the company’s foundation looks solid.

Until then, the choice between buying at the bottom or waiting depends on the investor’s risk appetite and their long-term vision for bitcoin’s growth.