Strategy (MSTR) is facing an institutional test as MSCI prepares to release the results of its November index review, a decision that could affect the Bitcoin treasury company’s place in passive investment portfolios.
JPMorgan analysts previously estimated that funds tracking MSCI indices could be forced to sell about $2.8 billion worth of MSTR shares if the stock is excluded. If other major index providers follow the same move, total outflows could reach $8.8 billion, according to the estimate.
Timing and Strategy’s response
The index changes are scheduled to take effect at the Nov. 30 close. Strategy has pushed back against MSCI’s proposal, arguing that the rules effectively target digital asset treasury companies under a different name. It also challenged MSCI’s classification of certain firms as non-operating businesses, saying the definition has no basis in U.S. GAAP, IFRS, or any recognized legal framework.
Strategy has maintained that its Bitcoin operations qualify as an operating segment under U.S. accounting rules, consistent with its discussions with SEC staff. The company warned that MSCI’s proposal introduces subjective policy decisions into index construction and could undermine the neutrality investors expect from index providers. Strategy has asked MSCI to withdraw the proposal.
Bitcoin impact debated
Market commentator KALEO believes Strategy could be among the companies removed, but said the threat may already be priced in. He noted that MSCI finalized its new eligibility rules on Oct. 15, after which Bitcoin steadily declined. Concerns remain about whether Strategy could eventually face cash constraints and be forced to sell some BTC holdings to meet financial obligations.
KALEO believes that scenario is far less likely than it appeared during the summer. His reasoning is that Strategy has shown a willingness to dilute common shareholders and adjust financial metrics to raise capital rather than sell Bitcoin. He expects that approach to continue, allowing the company to fund obligations while maintaining its BTC holdings.
While KALEO sees a potential MSCI removal as a negative development for MSTR over the longer term, he does not expect it to have much fundamental impact on Bitcoin itself.
