Major financial institutions have significantly reduced their exposure to MicroStrategy, with new regulatory filings revealing that several top investors quietly trimmed more than $5.4 billion from their holdings in the last quarter.
Recent disclosures show that institutional managers collectively sold about 14.8% of their MicroStrategy positions. Between the end of Q2 and Q3 2025, total institutional holdings fell sharply from $36.32 billion to $30.94 billion. Major asset managers—including Capital Group, Vanguard, BlackRock, and Fidelity, each cut positions worth around or more than $1 billion.
Although some of the selling appears linked to profit-taking, the broader motive was risk reduction, even as Bitcoin remained above the $100,000 mark during the period. Now, with Bitcoin in a deep pullback, pressure among investors has intensified.
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The crypto asset which is currently trading at $86,285 at the time of report, continues to move below key resistance levels as the market struggles to stabilize following an extended sell-off. Despite remaining inside a broader bullish order-flow zone, Bitcoin’s short-term trend has turned decisively bearish.
Data shows that short-term holders have been capitulating aggressively. SOPR metrics indicate that these investors have spent weeks selling at losses, forming a deep capitulation band.
Concerns surrounding MicroStrategy have grown further amid warnings that the company could be removed from both the Nasdaq 100 and the MSCI USA Index starting January 2026. JPMorgan analysts noted that MicroStrategy’s shrinking premium and increasing balance-sheet risk may lead to its exclusion from major equity benchmarks.
Removal from the MSCI USA Index, a benchmark tracking roughly 85% of the U.S. stock market could trigger billions in passive-investor outflows, as index-tracking funds would be required to sell the stock.
Recall that MicroStrategy began its aggressive Bitcoin strategy in 2020, converting cash reserves into BTC and issuing debt to acquire more. While this approach significantly boosted the company’s valuation during Bitcoin’s multi-year rally, the momentum has weakened sharply.
MSTR shares have fallen 40% in the past month and now sit 68% below their all-time high. The company currently holds 649,870 BTC at an average purchase price of $74,433. With Bitcoin down from its $126,000 peak to around $81,000, another drop would push the entire Bitcoin portfolio below breakeven.
Despite the pressure, MicroStrategy chairman Michael Saylor has maintained confidence in the company’s ability to withstand extreme market downturns. He recently outlined MicroStrategy’s balance-sheet stress limits, noting that even with $8 billion in debt and equity heavily tied to Bitcoin, the company could survive a 90% BTC drawdown before collateral levels become strained.
Saylor emphasized that, in a severe downturn, the firm would resort to equity dilution rather than selling its Bitcoin holdings, stating plainly that shareholders not the Bitcoin reserves, would absorb the losses. He reiterated the firm’s long-term conviction, insisting: “We’re not going to liquidate.”
Outlook
MicroStrategy enters the coming quarters under heightened scrutiny. With institutional holders cutting exposure, potential index exclusions looming, and Bitcoin still struggling to find support, the company faces a period of elevated volatility.
If BTC resumes its upward trend, MicroStrategy could reclaim lost ground, attracting renewed institutional confidence. However, continued downside in the crypto market would intensify pressure on the firm’s leveraged Bitcoin strategy and put additional strain on its share price.