MicroStrategy Faces Potential Liquidation Risk as Index Providers Eye Bitcoin Holdings

Market watchers are increasingly concerned about MicroStrategy’s mounting Bitcoin exposure following warnings from JPMorgan. The firm’s substantial cryptocurrency holdings could trigger forced outflows if MSCI decides to remove it from major equity indices. According to reports, approximately $2.8 billion in index-tracking funds could be automatically liquidated, creating significant selling pressure on the stock price throughout 2025.

This scenario has caught the attention of veteran commodity trader Peter Brandt, who has been vocal about Bitcoin’s potential during market corrections. Brandt has suggested that a sharp decline in BTC prices—potentially down to around $30,000 per coin—could present an accumulation opportunity for institutional players, including government entities interested in reserve diversification strategies.

Brandt’s Long-Term Bitcoin Thesis Remains Intact

Despite his controversial market observations, Brandt maintains a constructive outlook on Bitcoin. The seasoned trader currently holds 40% of his maximum BTC allocation, acquired at entry points significantly lower than MicroStrategy founder Michael Saylor’s average cost basis. Brandt frames potential market corrections not as bearish signals, but as natural resets that could ultimately strengthen Bitcoin’s long-term trajectory.

His price targets reflect this optimism: Brandt predicts Bitcoin could reach approximately $200,000 by Q3 2029, assuming the broader market navigates current macro headwinds. This projection aligns with his view that forced liquidations or significant corrections would shake out weak hands and consolidate holdings among committed long-term investors.

The MSCI Index Risk

The potential removal of MicroStrategy from MSCI indices represents a concrete near-term risk. Index providers have expressed concerns that companies with substantial cryptocurrency exposure may not align with traditional index composition criteria. If this action proceeds, passive funds tracking these benchmarks would automatically sell their MicroStrategy positions, regardless of technical or fundamental considerations.

Current BTC price at $87.50K reflects ongoing market debate about institutional adoption versus regulatory uncertainty. How MicroStrategy navigates this transition period could set important precedents for other Bitcoin-holding corporations entering traditional equity indices.