"Strategy - the original "bitcoin-on-NASDAQ" proxy - is now facing its most consequential structural risk since Michael Saylor began converting the firm into a leveraged BTC holding vehicle five years ago. A new JPMorgan research note warns that Strategy is "at risk of exclusion from major equity indices" as MSCI approaches a key January 15 decision on whether companies with large digital-asset treasuries belong in traditional stock benchmarks."
"With the company's market cap hovering around $59 billion and nearly $9 billion held in passive index-tracking vehicles, analysts say any exclusion could unleash severe mechanical selling pressure. Outflows could amount to $2.8 billion if MSCI removes Strategy - and as much as $8.8 billion if other index providers follow, the analysts noted. The current state of MSTR The warning lands at a vulnerable moment."
MicroStrategy holds nearly half its assets in bitcoin and sits at the extreme of a potential MSCI rule targeting companies with digital-asset treasuries above 50% of total assets. Exclusion from major indices could trigger mechanical selling, with estimated outflows of $2.8 billion from MSCI removal and up to $8.8 billion if other index providers follow. The stock has fallen substantially, with its mNAV premium collapsing and preferred securities selling off as yields rise. The firm’s equity-raise-to-buy-bitcoin model now faces structural headwinds after large recent share-price declines and growing liquidity pressure.
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