MSCI Removes Strategy From Indexes After Bitcoin Treasury Debate
MSCI is using a new non-operating screen, which means passive funds will have to trim MSTR. That could put more pressure on Strategy’s financing for Bitcoin purchases.
Key Takeaways
- After the closing auction on November 30, MSCI is removing Strategy from its global stock indexes, including the MSCI USA Index.
- The exclusion could reduce passive demand and add extra selling pressure, because index funds will have to cut their MSTR positions.
- The falling mNAV makes it harder for Strategy to raise capital through new share issuance for additional Bitcoin purchases.
MSCI is removing Strategy from its global stock indexes after the closing auction on November 30, including the MSCI USA Index. The index provider is doing this with a new screen for so-called non-operating companies. For Strategy, the largest publicly traded holder of Bitcoin, that could further reduce access to passive demand, although some of the impact already seems to be priced in.
What MSCI Is Doing Exactly
The exclusion does not mean Strategy is disappearing from the stock market. The shares will still trade normally, and the company does not have to sell its Bitcoin. But funds that track MSCI indexes will have to reduce their position. That could add extra selling pressure on MSTR, because index funds have to follow their mandate.
MSCI applied the new rule on October 15. Metaplanet, a Tokyo-listed Bitcoin treasury company, was also removed from the MSCI Japan Small Cap Index as a result. The move fits into a broader reassessment of companies that mainly hold large crypto positions instead of operating like a traditional business.
Pressure on the Buying Model
According to Strategy itself, MSCI-tracking funds hold about 13 million shares, or 3.1% of the outstanding share count. BloFin Research came to a similar estimate and said that equals less than one day of normal trading. JPMorgan previously estimated that the exclusion could lead to $2.8 billion (€2.5 billion) in outflows, although the bank based that on an earlier version of the proposal.
The core of the story is not just the possible selling of MSTR, but whether Strategy can still raise new capital as easily to buy Bitcoin. The company has long financed those purchases with convertible bonds, preferred shares, and common stock. That works best as long as the stock trades above the value of the Bitcoin stash.
That premium, often expressed as mNAV, has now shrunk sharply. Strategy was still around 3.4x in November 2024 and is now around 1.08x. If that premium keeps shrinking, new share issuance becomes less attractive for existing shareholders and it gets harder to keep the same Bitcoin buying machine running.
Why This Matters for Europe
For European crypto followers, this matters because it shows how traditional index providers deal with listed companies that are mostly seen as Bitcoin vehicles. If MSCI keeps going down this path, other major index providers like S&P Dow Jones and FTSE Russell could also become stricter. That could further limit these companies’ access to passive capital flows, without saying anything directly about Bitcoin itself.
The broader market is feeling that shift too. During a recent stretch of weak demand and ETF outflows, it became clear how fast sentiment can turn, as the pressure on spot Bitcoin ETFs showed.