MicroStrategy (MSTR) stock endured a brutal 2025, plummeting 49.3% in value as sustained selling pressure drove shares to their lowest level since late September 2024. The company, the world's largest corporate holder of Bitcoin, saw its market capitalization shed nearly $90 billion over the past six months alone, according to analyst Ted Pillows. The downturn is closely tied to Bitcoin's underwhelming 2025 performance, which ended the year down 5.7%, defying bullish forecasts.
MicroStrategy's fundamental challenge lies in its massive Bitcoin exposure. The company holds 672,497 BTC, representing roughly 3.2% of Bitcoin's total supply, acquired at a cost of over $50 billion. This dwarfs its core software business, which generates approximately $460 million in annual revenue. Currently, the company's Bitcoin holdings are valued at roughly $59 billion, while its total market cap sits at about $46 billion, indicating the stock is trading at a 20-25% discount to its underlying Bitcoin net asset value (NAV).
A critical near-term risk looms with a pending decision from index provider MSCI. MSCI has proposed reclassifying companies whose digital asset holdings exceed 50% of total assets as "funds," potentially making them ineligible for key equity benchmarks. A final decision, expected by January 15, could result in MicroStrategy's removal from MSCI indexes. JPMorgan estimates such an exclusion could trigger up to $8.8 billion in forced selling, exacerbating pressure on the already fragile stock.
Despite the severe headwinds, investment firm Benchmark Company has reaffirmed its Buy rating on MicroStrategy with a 2026 price target of $705 per share, implying a potential gain of over 360% from current levels. Benchmark views the company as a high-conviction proxy for Bitcoin exposure and believes the significant discount to NAV presents a compelling risk-reward scenario. The firm's confidence is rooted in the long-term thesis of Bitcoin's increasing adoption as a corporate treasury asset and digital store of value, a trend MicroStrategy pioneered.
MicroStrategy has maintained that its balance sheet is robust enough to withstand major Bitcoin downturns, stating it could handle a drop to its $74,000 average cost basis and even a plunge to $25,000 per BTC. As 2026 begins, the company's fate remains tethered to Bitcoin's price action and the imminent MSCI ruling, which will shape its near-term trajectory.
