Bitwise: Strategy (MicroStrategy) Will Not Be Forced to Sell Its Bitcoin Holdings
Bitwise CIO Matt Hougan dismissed claims that Strategy (formerly MicroStrategy) would be forced to liquidate its large Bitcoin treasury if removed from MSCI indexes or after recent BTC price weakness. In a Dec. 3 note titled “No, Virginia, Strategy Is Not Going To Sell Its Bitcoin,” Hougan called the premise that index exclusion or market pressure would compel sales “completely flawed.” He estimates a 75% chance Strategy could be removed from indexes but says trading below NAV would not legally or operationally force Bitcoin sales. Hougan highlighted Strategy’s liquidity buffer — approximately $1.44bn raised via at‑the‑market equity issuance — intended to cover dividends and interest for at least 12 months, and noted the company’s first debt maturity is in 2027. Bitwise also pointed out that past index flows were overstated (when Strategy joined the Nasdaq‑100, ~$2.1bn in buying had little price impact) and that recent price declines already price in some risk. Separately, Strategy has continued to add BTC (Bitwise reports Strategy’s reported total near 650,000 BTC). Bitwise’s view aims to calm fears of forced large-scale BTC liquidations that could cascade through markets; traders should monitor index decisions, Strategy liquidity, and any change in corporate policy on selling appreciated coins versus holding.
Neutral
The news reduces the probability of a forced, large-scale Bitcoin sell-off by Strategy, which limits downside price shock. Hougan’s argument that index exclusion would not legally or operationally compel sales, plus Strategy’s $1.44bn liquidity reserve and multi-year debt runway, suggest no immediate technical need to liquidate BTC holdings. Continued incremental BTC purchases and Bitwise’s observation that index flows often have muted price impact further lessen near-term liquidation risk. However, the story still carries some downside exposure: index decisions, market sentiment, or a change in corporate policy (e.g., selling appreciated coins to fund operations) could trigger meaningful selling. For traders, that implies a neutral-to-moderate impact: the immediate risk of a panic-driven crash tied to forced sales appears limited (neutral), but monitoring index reconstitution dates, Strategy disclosures, and on‑chain/flow indicators is warranted because a policy shift or liquidity strain could become bearish. Short-term volatility may increase around index announcements; long-term fundamentals remain largely unchanged by this clarification.