According to Woofun AI, the "Bitcoin treasury" business model that Strategy (MSTR.US) relies on for survival is facing severe scrutiny from traditional financial benchmark systems, and its legitimacy for continued inclusion in global indices is being directly challenged by new MSCI rules.
This listed company, known for accumulating Bitcoin through high leverage, has seen its core asset structure flagged as a key review target by the international index compiler MSCI due to its lack of substantive operating business. Although Michael Saylor has tried hard to downplay the potential impact, market anxiety is spreading, because losing index constituent status would not only mean the withdrawal of billions of dollars in passive funds, but could also sever the financing lifeline that allows the company to keep adding to its Bitcoin position through capital markets.
This event has gone beyond simple stock volatility and become a key test of whether digital asset companies can secure survival space within the traditional financial framework. The time window is narrowing rapidly, and November 11 will be the critical date determining Strategy's fate, when MSCI will announce the final list of companies affected by the new rules. If the ruling results in removal, the related adjustments will officially take effect after the close of U.S. markets on November 30, triggering chain reactions across the market.
JPMorgan's 2025 estimates reveal the potential scale of the liquidity shock: passive selling linked to MSCI indices alone could reach as much as $2.8 billion. In its consultation response, Strategy (MSTR.US) itself estimated that MSCI All Country Investable Market Index-linked funds hold about 13 million of its shares, representing 3.1% of basic shares outstanding and roughly equivalent to 60% of its 30-day average daily trading volume. However, this figure is only the tip of the iceberg. If other major index providers subsequently follow with similar removal measures, cumulative passive selling could climb further to $8.8 billion. Capital outflows of this scale are not theoretical speculation, but are based on the mechanical rules requiring tracking funds to rebalance according to weight.
For Strategy (MSTR.US), this is not only short-term pressure on its stock price, but also a severe shock to the foundation of its market liquidity. Any effort to maintain a high valuation through the secondary market will appear fragile in the face of a collective retreat by passive funds. While external pressure intensifies, adjustments to Strategy's internal governance structure are also proceeding in parallel, attempting to stabilize shareholder confidence by optimizing its capital structure.
On October 28, the company announced that, based on preliminary voting results, shareholders had approved charter amendments allowing daily dividend payments on its four series of preferred stock. After the revised provisions take effect in the filing, they will first be implemented on the STRC series preferred stock on November 1, and are planned to gradually cover the STRF, STRK, and STRD series by January 1, 2027.
However, this optimization of internal financial arrangements cannot directly influence MSCI's index inclusion ruling. The new rules adopted by MSCI on October 15 and effective after the close on November 30 establish a stringent substantive asset review system: first, companies are screened for whether they have operating assets; those that fail must undergo five financial ratio tests, and if at least four are not met, a determination of loss of eligibility is triggered. For existing constituents, formal removal only occurs if they fail the screening in both of the most recent two consecutive fiscal years' annual financial reporting periods, while interim financial reports may also be included in the comprehensive assessment.
This means that even if Strategy (MSTR.US) improves the appearance of cash flow through preferred stock reform, it may still not escape removal if it cannot persuade MSCI on the core definition of "substantive operations." It is worth noting that this index purge targeting the "Bitcoin treasury" model is not an isolated event, and its scope is expanding.
In addition to Strategy (MSTR.US), several listed companies adopting similar strategies have been placed on MSCI's watch or potential removal lists. Japanese-listed company Metaplanet and Upexi (UPXI.US) have been explicitly listed as potential removal targets, while Sharplink (SBET.US), Ton Strategy Company (TONX.US), Solana Company (HSDT.US), and DeFi Development Corp. (DFDV.US) are also on the watch list for possible removal. This phenomenon indicates that MSCI's new rules are intended to systematically clean up pure investment vehicles lacking traditional operating assets, regardless of whether their underlying assets are Bitcoin or other crypto tokens.
Woofun AI's compiled data show that these companies share a common trait: heavy reliance on equity financing to purchase crypto assets rather than generating cash flow through core businesses. This homogeneous business model makes them collectively vulnerable when facing the same set of index screening standards. Once Strategy (MSTR.US) is removed, other similar companies are highly likely to face the same review pressure, possibly triggering cross-market linked selling, and the valuation logic of the entire "Bitcoin treasury" sector will face reconstruction.
The deeper impact of index removal goes far beyond short-term stock price fluctuations; it will directly strike at Strategy's long-term financing capacity and the basis for its stock premium. Brian Dobson, who leads disruptive technology research at Clear Street, pointed out that inclusion in mainstream indices is a key pillar supporting stock buying demand, because it brings continuous passive inflows, including weekly 401(k) retirement contributions from millions of ordinary investors and allocations by various mutual funds. Once removed from the index, tracking funds are forced to sell holdings, creating heavy short-term selling pressure.
More critically, the huge amounts of capital Strategy needs to purchase Bitcoin have historically depended on issuing additional common stock, issuing preferred stock such as STRC and STRK, and convertible bonds. Crypto analytics firm ZEROBASE emphasized that passive investment funds have become a key cornerstone supporting buying demand for such concept stocks. As market concerns over equity dilution risk intensify, Strategy's early stock premium has narrowed sharply, forcing it to turn to preferred stock financing, but market enthusiasm for subscribing to these preferred securities is also fading.
Two Prime CEO Alexander Blume acknowledged that digital asset treasury companies are not regarded as real operating companies from the perspective of traditional finance, and the difficulty of continuing to sell equity in the future to sustain the accumulation flywheel is rising sharply. When Strategy (MSTR.US) was previously not selected for the S&P 500, it already suffered a major blow to trust. If it is removed by MSCI this time, its financing channels will narrow further, and it could even fall into a vicious cycle of "unable to finance, unable to buy coins, declining asset share, and further valuation declines."
In response to outside concerns, management's response has focused on definitions and procedures. In an October 18 interview with Bloomberg Television, Michael Saylor said the scale of capital MSCI actually controls and allocates is "negligible," accused the institution of "imposing biased values on digital assets," and characterized the potential decision as a "value judgment" that would set a harmful precedent. He also said he had "no particular expectation" about whether the company would ultimately be removed and hoped MSCI would reconsider this direction.
However, this downplaying strategy can hardly conceal structural risks. The final adjustment taking effect after the close on November 30, 2026, will make completely clear whether Strategy (MSTR.US) and other Bitcoin treasury companies will be removed from widely tracked global equity benchmark indices. This is not just about whether one company stays or goes, but a landmark event determining whether digital asset companies can obtain long-term survival space within the framework of traditional financial legitimacy.
If the ruling is unfavorable, it will confirm the traditional financial system's rejection of pure crypto asset holders and force the industry to rethink the integration boundary between decentralized assets and centralized capital markets. Conversely, if the company is retained, it may open a gap for more crypto-native companies to enter mainstream indices in the future. In any case, the November 11 announcement will be a watershed, determining the allocation path and valuation anchor for Bitcoin in institutional portfolios over the next several years.
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