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- Strategy says its Bitcoin reserve still covers its debt even at far lower prices, aiming to calm lenders as market volatility intensifies

- Institutional rotation to ETFs and index-eligibility risks are pressuring Strategy, pushing its market value below its BTC holdings

Strategy (NASDAQ: $MSTR ) has moved to reassure lenders and equity holders as volatility deepens across digital-asset markets and traditional equities. The firm stated that its Bitcoin (CRYPTO: $BTC ) reserve, one of the largest corporate holdings globally, remains more than adequate to cover its convertible debt, even under sharply lower price assumptions.

The message comes at a moment when the company is facing simultaneous pressure from declining shares, major index-eligibility questions, and a rotation by institutional investors toward alternative Bitcoin exposure.

Debt Coverage Claims Amid Market Strains

In an update shared on X, Strategy outlined its internal "BTC Rating," a metric comparing the value of its Bitcoin treasury to its outstanding notes. The company said the ratio stands at 5.9x when Bitcoin trades at $74,000, its approximate average purchase level.

https://x.com/Strategy/status/1993402890690740233?s=20

It added that even if the cryptocurrency dropped to $25,000, the reserve would still equal roughly twice the firm's convertible obligations. Data from BitcoinTreasuries places Strategy's holdings near 650,000 BTC, valued at more than $57 billion.

The declaration arrives as the firm contends with steep share-price declines and another removal from the S&P 500 Index on November 25. Analysts have also highlighted notable outflows from institutional holders. Shanaka Anselm Perera reported that large investors withdrew around $5.4 billion from the stock during the third quarter.

Institutional Positioning and Index Uncertainty

Further scrutiny may come early next year when MSCI issues a ruling that could determine whether companies holding a majority of their assets in crypto qualify for inclusion in broad equity indices. JPMorgan analysts previously estimated that an exclusion could lead to approximately $8.8 billion in forced divestment.

The projection drew criticism across social platforms, though Perera later noted that SEC filings show JPMorgan does not hold a short position in Strategy stock; instead, the bank sold shares and maintains put options.

The same quarter saw differing institutional behavior elsewhere. Perera observed that Harvard University accumulated a $443 million stake in BlackRock's spot Bitcoin ETF, an example of a shift toward ETF-based exposure over corporate vehicles that function as leveraged proxies for Bitcoin.

Price rotation in favor of ETFs has pushed Strategy's market capitalization below the value of its Bitcoin holdings for the first time in five years. Despite that shift, the firm recently transferred more than 58,000 BTC to Fidelity Custody and has raised $21 billion so far this year to finance further purchases.