Strategy (MSTR) CEO on Potential MSCI Exclusion, Latest Bitcoin Acquisition & More

Phong Le, President & CEO of Strategy (MSTR), joins Market On Close to discuss their latest bitcoin acquisition and its balance sheet. The company has struggled in the last few months, even before the current crypto winter: it is down around -57% since last year and -39% year-to-date.

Strategy, formerly MicroStrategy, used to be primarily a software company. However, over the last few years, it saw an opportunity in holding crypto. This began before many crypto products were publicly available to trade, so the company holding bitcoin reserves gave investors proximate access. Now, it is primarily known on Wall Street for its enormous crypto holdings, which come in around 660,000 bitcoins, currently worth near $60 billion. 

Two weeks ago, Strategy announced it would create U.S. dollar reserves to ensure it could pay its dividend going forward. However, on the back of the “volume and liquidity” last week, Le argues it was a good time to buy more bitcoin – around a billion dollars’ worth. “Bitcoin is always an important purchase and a good buy for us.”

“Paying those dividends gives us access to a $60 trillion dollar credit universe, and that’s what we’re really focused on.” If the price of bitcoin goes up 1.25%, they could pay their dividend, “into eternity,” Le says. 

Along with Bitcoin’s fall this year, Strategy is facing another major potential issue. MSCI is proposing to exclude companies with greater than 50% of their assets in digital assets. The final decision will be announced January 15.

Le calls this a “misinformed and misguided” decision, saying that the characterization of Strategy as a fund rather than an operating company is invalid. “The 50% threshold feels very arbitrary,” he argues, and continues that this is MSCI making “policy considerations” when indexes are “supposed to be neutral.”

JPMorgan has warned that a potential exclusion could trigger billions of dollars in outflows. The analysts estimate that about $9 billion of its total market cap is likely in passive holdings like ETFs, or other funds tied to major benchmarks or indexes. If others follow MSCI’s example, they think the hit could be between $2.8-$8.8 billion (its current market cap is around $51 billion).

While Strategy indeed continues to sell software, focusing on analytics, its revenue has been falling over the last few years – though this year it’s perked back up, with one quarter left to go.

One thing investors should consider is that many crypto mining operations have turned into AI data centers – CoreWeave (CRWV) is an example. It’s clear they see a more lucrative opportunity during the massive AI capex spend. However, this then sucks interest out of crypto markets as the computing power is turned to a new project. Will this be a temporary shift, or permanent?

Another factor is U.S. friendliness towards crypto has allowed more products to come to market, giving investors a greater range of investment vehicles to choose from, like spot ETFs and more. This could also be competing with Strategy, since investors don’t need it for crypto exposure as much as before.

Le maintains his optimistic tone into the future, claiming that “2026 is going to be the year where we see the intersection of defi and trad-fi in a big way.” More adoption leads to higher prices, leads to higher value for their holdings. Strategy currently holds around 3% of the total bitcoin supply, making it a major stakeholder in whatever happens next.

Watch the full interview below:

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