MSCI’s Decision to Drop Strategy Could Trigger a Setback for Its Bitcoin Ambitions

MSCI’s decision to remove Strategy from its major stock market indexes could weaken the company’s ability to continue purchasing Bitcoin, analysts warn. The move may force passive investment funds to sell their MSTR holdings, while also putting pressure on the financing strategy that has helped the company build its massive BTC reserves. However, some market experts believe investors have already anticipated much of the potential fallout.

MSCI confirmed that Strategy (MSTR), the world’s largest publicly traded corporate Bitcoin holder, will be excluded from several major global equity benchmarks, including the MSCI USA Index, after the market closes on November 30.

The decision follows new screening criteria for companies classified as non-operating businesses, which the index provider introduced on October 15. The same policy has also led to the removal of Japanese Bitcoin treasury firm Metaplanet (3350) from the MSCI Japan Small Cap Index.

Analysts believe the exclusion could limit Strategy’s access to passive investment demand and make future capital raises more challenging. Nevertheless, opinions differ over how much selling pressure the decision will generate.

MSCI indexes are followed by numerous investment funds that replicate their benchmark allocations. When a company loses its place in an index, these funds typically have to sell their shares, potentially creating additional downward pressure.

However, the exclusion will not affect Strategy’s stock exchange listing or force it to sell its Bitcoin holdings. The company currently owns 850,364 BTC, worth approximately $62.6 billion.

MSCI Exclusion Could Trigger $1.6 Billion in Share Sales

The amount of potential selling remains uncertain, with research firms offering different estimates.

BloFin Research expects funds tracking MSCI benchmarks to offload approximately 13 million MSTR shares. That represents about 3.1% of Strategy’s outstanding shares and less than one day’s average trading volume.

Strategy provided a similar assessment in its response to MSCI’s consultation, estimating that funds tracking the provider’s global investable indexes hold roughly 13 million of its shares.

Based on Wednesday’s prices, those holdings were worth approximately $1.6 billion.

JPMorgan previously projected a larger impact, estimating in November 2025 that the exclusion could result in $2.8 billion in outflows. The figure could potentially rise to $8.8 billion if other index providers introduce similar restrictions.

However, that forecast was based on MSCI’s original proposal rather than the final screening rules adopted following the review.

Bitcoin Purchasing Strategy Faces a Bigger Threat

Beyond the immediate selling pressure, analysts are concerned about how the loss of passive demand could affect Strategy’s ability to finance additional Bitcoin acquisitions.

The company has historically funded its purchases through convertible notes, preferred stock, and common share offerings.

This approach relies on maintaining a market net asset value (mNAV) premium above 1x. When Strategy’s shares trade above the value of its underlying Bitcoin reserves, the company can issue equity at a premium and use the proceeds to acquire more BTC.

This can increase the amount of Bitcoin backing each outstanding share, benefiting existing shareholders.

However, the advantage becomes significantly smaller when the mNAV approaches 1x. If the multiple falls below that threshold, issuing additional shares could dilute existing investors rather than increase their Bitcoin exposure.

BloFin Research warned that MSCI’s decision could further reduce Strategy’s mNAV premium, currently around 1.08x, making future equity financing less attractive.

Strategy’s Valuation Premium Has Fallen From 3.4x

Strategy’s mNAV has already declined sharply from approximately 3.4x in November 2024 to around 1.08x, putting its Bitcoin accumulation model under increasing pressure.

Its latest financial disclosures also highlight how the company is allocating the capital it raises.

In a November 9 filing covering the week ended November 8, Strategy reported generating $283.8 million through the sale of approximately 2.05 million common shares.

However, only $81.9 million was directed toward Bitcoin purchases, allowing the company to acquire 1,036 BTC.

Another $188.3 million was used to repurchase STRC preferred shares, while $13.6 million was added to its cash reserves.

The filing showed that Strategy maintained approximately $4.77 billion in cash as of November 8. The company withdrew $21.1 million from that reserve to cover preferred dividends during the reporting week and reported no Bitcoin sales.

Analysts Believe Much of the Selling Pressure Is Already Priced In

Markus Thielen, founder of 10x Research, believes Strategy’s exclusion may not produce a major market shock because investors have already had time to prepare for the development.

He expects MSTR shares to remain under pressure as the premium over the company’s Bitcoin holdings continues to shrink.

Thielen also does not expect the MSCI decision to significantly affect Bitcoin’s broader market performance. He explained that publicly traded treasury companies have become less influential as their valuation premiums have compressed.

He believes investors are increasingly recognizing that businesses simply holding Bitcoin do not necessarily generate additional value beyond the cryptocurrency itself.

Although passive funds will need to reduce their MSTR exposure, Thielen expects other investors to purchase those shares at somewhat lower prices.

He also noted that several funds were already holding fewer Strategy shares than their benchmark allocations required, potentially reducing the scale of forced selling.

Derin Olenik, an independent Bitcoin analyst, is more concerned about the longer-term consequences.

While his estimate of potential selling pressure broadly matches JPMorgan’s $2.8 billion projection, he believes the exclusion could undermine the institutional adoption narrative that supports the Bitcoin treasury business model.

Olenik warned that the immediate selling pressure could exceed $2.8 billion and potentially surpass $11 billion if other major index providers follow MSCI’s decision.

Bitcoin Treasury Companies Face Pressure to Evolve

The latest development could accelerate the need for Bitcoin treasury firms to rethink their business strategies.

Thielen believes these companies should operate more like asset managers by generating additional returns from their Bitcoin reserves rather than relying exclusively on accumulation and financial engineering.

He suggested that productive investment strategies and yield-generating activities could help treasury companies demonstrate their ability to outperform the broader market.

Olenik shares a similar outlook, describing the next stage of the industry as “Treasury 2.0.”

Under this model, companies would focus on building Bitcoin infrastructure, expanding network adoption, strengthening its monetary utility, and developing revenue-generating businesses around the asset.

The objective is to transform Bitcoin holdings into productive assets that generate sustainable shareholder value, rather than depending entirely on rising BTC prices and repeated capital raises.