Julian Hosp, founder of Cake DeFi, has expressed concerns over MicroStrategy’s declining market value and potential index-driven selling. He suggests that these factors could prompt new shareholders to sell, increasing the company’s risk of failure and creating significant downside for Bitcoin. Hosp made these comments on X.
“$MSTR’s mNAV (basic and diluted) is expectedly getting worse and worse,” said Hosp. “Who in their right mind is going to even remotely consider buying their common or preferred stock, knowing they very likely become exit liquidity over the next 4-8 weeks to all the indices having to sell. It’s seems game-over for Strategy and thus for bitcoin. Strategy will go insolvent and drag BTC with it.”
According to Hosp, Strategy (formerly MicroStrategy) is facing intense scrutiny due to its leverage, falling share price, and exposure to Bitcoin. Recent reports indicate that as Bitcoin’s value has decreased, Strategy’s market-to-net asset value (NAV) multiple has compressed toward or below 1.0. This situation raises fears that equity investors may no longer be willing to pay a large premium over the value of its Bitcoin holdings. Analysts warn that index providers such as MSCI might remove digital-asset-treasury firms from key benchmarks, potentially triggering mechanical selling by index funds and adding pressure to already stressed balance sheets—an issue Hosp highlights when he warns about shareholders becoming “exit liquidity.”
Strategy is the largest public corporate holder of Bitcoin, with approximately 649,870 BTC on its balance sheet as of mid-November 2025. These were acquired at a total cost of roughly $33 billion and an average price in the mid-$60,000s per coin. At recent prices, those holdings have been valued around $55 billion; however, this mark-to-market figure can fluctuate significantly as Bitcoin’s price changes. The company has financed much of this position with approximately $6–7 billion in convertible debt maturing through 2028 and has begun issuing Bitcoin-backed preferred and digital credit securities. This raises questions about its ability to service obligations if Bitcoin enters a prolonged downturn.
MSCI is conducting a formal consultation on “digital asset treasury companies” whose balance sheets are predominantly crypto-based. It proposes excluding firms with more than 50 percent of assets in digital currencies from its flagship equity indexes. The process runs through December 31, 2025, with final conclusions due January 15, 2026, and any changes implemented in the February index review. Analysts at JPMorgan estimate that removing companies like Strategy from MSCI benchmarks alone could trigger around $2.8 billion in forced selling by index-tracking funds and up to $8–9 billion if other families like Russell follow suit. This scenario helps explain Hosp’s concern about an “exit liquidity” dynamic and spillover risk to Bitcoin itself.
Dr. Julian Hosp is an Austrian-born entrepreneur who transitioned from a medical career and professional kitesurfing into the crypto industry. He co-founded TenX in the mid-2010s and launched Cake DeFi in 2019—a platform facilitating cash flow generation from digital assets through staking, lending, and other yield strategies. Hosp now manages his own nine-figure family office while producing educational content on blockchain and investing.
