Bitwise CIO Calls Strategy Bitcoin-Sell Narrative “Flat Wrong” in New Client Memo Note

Bitwise Chief Investment Officer Matt Hougan is rejecting a growing claim that Strategy could be compelled to sell Bitcoin. He called the premise just flat wrong. His note argues that neither index changes nor market pressure creates a requirement to liquidate the firm’s BTC holdings.

Bitcoin Jitters as MSCI Weighs Strategy

A client note carried the title “No, Virginia, Strategy Is Not Going To Sell Its Bitcoin.”Hougan said two themes have dominated his inbox. Investors have focused on potential MSCI index removal and the idea that such a move could force Strategy to unwind its BTC position.

MSCI is considering excluding digital asset treasury companies from its investable indexes, with a decision due on January 15. JPMorgan recently estimated that a removal could trigger up to $2.8 billion of passive selling of Strategy stock. Hougan said he assigns a 75% chance that the company is removed.

Index changes, in Hougan’s view, often matter less than forecast. He pointed to Strategy’s addition to the Nasdaq-100 last year, which required funds to buy $2.1 billion of shares, yet the price barely moved. He added that the stock’s decline since Oct. 10 likely reflects market pricing in the removal risk and said he does not expect substantial swings either way.

Attention has also shifted to a “doom loop” scenario described by worried investors. That storyline begins with MSCI exclusion driving the stock lower. It then assumes the share price falls well below net asset value. 

He said a discount to net asset value does not force Bitcoin sales. The relevant constraints, he argued, are the company’s actual payment obligations rather than how the stock trades relative to BTC value.

Recent disclosures provided more detail on positioning and liquidity. On Monday, Strategy buys 130 BTC for about $11.7 million at an average price of $89,960 per BTC. Total holdings were reported at 650,000 BTC after the purchase.

BTC Liquidity Build Reduces Sell Pressure

Strategy also outlined how it plans to use that cash buffer. The firm said its current intention is to keep a reserve sufficient to fund at least twelve months of dividends. The company said it plans to grow the reserve over time, with a target of ultimately being able to weather 24 months or more.

Saylor outlined a trajectory that involves BTC sales without diminishing exposure in the long term. The firm can sell overvalued Bitcoin, pay out dividends and still increase its stash of the digital currency over time, he added. The framing was an effort to counteract negative narratives around payout liabilities.

Hougan said the near-term math still does not support liquidation fears. He said $1.4 billion in cash can cover commitments for about a year and a half. He added that the first debt maturity does not arrive until February 2027 .The totals about $1 billion, which he characterized as small relative to the firm’s roughly $60 billion Bitcoin holdings.

Legitimate concerns remain in the market, including slow progress on crypto market structure legislation. He also pointed to the health of smaller digital asset treasury companies. Strategy’s BTC position, he argued, should not be treated as a near-term forced-sale risk, regardless of the MSCI outcome.