A leading cryptocurrency investment executive has sought to allay market fears that Strategy, a major corporate holder of Bitcoin, would be compelled to sell its vast digital asset reserves.
Matt Hougan, Chief Investment Officer of Bitwise Investments, dismissed widespread speculation about a forced Bitcoin sale by Strategy, which holds 650,000 BTC. These holdings are currently valued at approximately $60 billion.
Concerns arose from a potential decision by MSCI, a global index provider, to remove Strategy from its key stock indexes. The market had speculated that such an exclusion could trigger a “doom loop,” forcing the software company to liquidate its Bitcoin to cover potential stock declines or debts.
“There are many things to worry about in crypto. Michael Saylor and Strategy selling bitcoin is not one of them,” Hougan stated in his memo, titled “No, Virginia, Strategy is not going to sell its bitcoin.”
MSCI announced in October that it was evaluating whether to reclassify “crypto treasury companies” like Strategy. The provider considers them more akin to “holding companies” than operational entities, a move that could lead to their exclusion from benchmark indexes.
Strategy’s Co-founder and Executive Chairman, Michael Saylor, has publicly argued that his company is “much more than an operating company.”
Hougan estimates a 75% probability that MSCI will decide on Strategy’s exclusion by January 15. JPMorgan has projected that this could lead passive funds to sell up to $2.8 billion in Strategy shares, traded under the ticker MSTR.
However, Hougan downplayed the impact, drawing on his experience with index changes. He noted that such events are often “priced in well in advance,” resulting in “typically smaller” effects than anticipated.
He cited Strategy’s December inclusion in the Nasdaq-100, which required $2.1 billion in purchases but barely moved its stock price. Strategy’s shares have already fallen 59% from their summer peak since the MSCI announcement, an adjustment Hougan believes reflects the market’s anticipation of the risk.
He rejected the “doom loop” theory, which posits that a significant stock price drop below net asset value would force Bitcoin sales. Hougan detailed that Strategy’s annual interest payments are approximately $800 million, comfortably covered by its $1.4 billion in cash, which is sufficient for 18 months.
The company’s first major debt maturity, a $1 billion obligation, is not due until February 2027. Hougan described this as “insignificant” compared to its Bitcoin reserves. Strategy recently purchased an additional 130 BTC for $11.7 million.
Saylor has affirmed that while the company could sell Bitcoin to pay dividends, its primary strategy is to continuously increase its holdings. Hougan highlighted Saylor’s unwavering conviction in Bitcoin, noting he did not sell during previous market downturns.
A $60 billion Bitcoin sale, equivalent to two years of flows into U.S. spot Bitcoin exchange-traded funds, would be “a devastating blow to the market,” Hougan conceded, but he does not foresee it happening due to market liquidity structures.
Hougan concluded his memo by urging selective calm, acknowledging genuine risks in the crypto sector but asserting that Strategy’s situation is not among them. “Conviction in bitcoin has a cost: it demands tough patience when volatility strikes,” he reflected, suggesting that such patience could ultimately be rewarded.
The Bitwise report comes as Bitcoin consolidates above $90,000 after several weeks of price fluctuations.