According to Woofun AI, MSCI (MSCI.US), a globally authoritative index compiler, is considering a major adjustment that could reshape the boundary between crypto assets and traditional finance, with the core focus directly on the index eligibility of Strategy (MSTR.US), the largest institutional buyer of Bitcoin. This potential removal is not only about a single company's valuation logic but could also trigger billions of dollars in passive capital outflows, thereby deeply impacting the liquidity structure of the Bitcoin spot market.
The timeline is pushing the market toward a critical juncture. The final result is expected to be officially announced after 6 a.m. Beijing time on November 12, when the market will learn whether Strategy (MSTR.US) is confirmed for removal. As of the close on November 10 Eastern Time, Strategy (MSTR.US)'s common stock closed at $121.07, down 3.60% on the day, and down about 6.4% from the November 5 close of $129.30, with market sentiment already reflecting some pessimistic expectations. According to the latest data disclosed by the company on November 9, as of November 8, it held a total of 850,364 Bitcoins, with a cumulative purchase cost of about $64.16 billion. If the final list confirms its removal, globally passive tracking funds will begin mandatory rebalancing before the close on November 30, triggering $1.57 billion to $2.8 billion in forced selling, which will directly suppress Strategy (MSTR.US)'s equity premium and block its core channel for delivering incremental buying pressure to the crypto spot market.
The deeper logic behind this adjustment stems from the evolution of MSCI's screening rules. Last October, MSCI proposed a removal plan for treasury companies whose digital assets accounted for 50% or more of total assets. In January of this year, it decided not to implement it in the February review and turned to a broader review of non-operating companies. On October 16, MSCI finalized a new index eligibility rule. Starting with the November index review, listed companies that mainly rely on holding assets for value and lack actual operating activities may be classified as "non-operating companies" and no longer qualify for inclusion in the MSCI Global Investable Market Index. This means that companies such as Strategy (MSTR.US), Metaplanet, and Upexi (UPXI.US), which rely on capital market financing to buy coins, may no longer be regarded by MSCI as ordinary operating enterprises, and their index status faces a fundamental challenge.
The breadth of the affected list reveals the scale of this adjustment. MSCI also published a potential affected list involving 22 companies, 14 of which are directly related to cryptocurrencies. Among the 5 companies proposed for deletion, 3 are digital asset treasury companies: Bitcoin treasury company Strategy (MSTR.US), Bitcoin treasury company Metaplanet, and SOL treasury company Upexi. The other two are UK uranium investment company Yellow Cake and Icelandic investment holding company SKEL, indicating that the rule is not formally aimed only at crypto assets. In addition, 17 of the 22 companies are on the watchlist, 11 of which are related to crypto assets, including ETH treasury company SharpLink (SBET.US), CC (Canton) treasury company Canton Strategic Holdings, ZEC treasury company Cypherpunk Technologies (CYPH.US), SUI treasury company SUI Group, TON treasury company TON Strategy, BTC treasury company Capital B, SOL treasury company Solana Company, SOL treasury company DeFi Development (DFDV.US), WLFI treasury company AI Financial, RAIN treasury company Enlivex, and GD Culture, which holds BTC and once announced an allocation to TRUMP; the remaining 6 are non-crypto investment holding companies, including Canada's Urbana and Stack Capital. Data compiled by Woofun AI shows that this list covers a wide range of treasury entities from mainstream public chains to niche tokens, demonstrating the traditional index system's systematic rejection of the "shell-company coin-hoarding" model.
The core of the controversy lies in the definition of "operating." Strategy (MSTR.US) has objected to the new methodology, arguing that it still operates a software business and reports its Bitcoin business as an operating segment in its financial statements, and that MSCI's new rule in effect again targets digital asset treasury companies. However, MSCI's screening mechanism is more stringent: the new rule first conducts a core screening to determine whether a company's operating assets exceed 50% of total assets. Companies that fail this test must also undergo five financial indicator checks: operating asset intensity, expense intensity, operating cash flow, non-operating fair value intensity, and capital dependence. If four or more are triggered, they may lose index eligibility. For companies already in the index, MSCI requires that they fail the screening in both of the most recent two annual reporting periods before removal, so those merely on the watchlist may at the earliest be removed in the next round; the 5 listed as "proposed for deletion" this time will take effect after the close on November 30. MSCI stated that the new screening method targets companies whose financial characteristics resemble investment vehicles, and its scope is not limited to enterprises holding crypto assets, aiming to isolate entities lacking real operating cash generation capability.
Selling pressure estimates reveal the potential liquidity shock. Once Strategy (MSTR.US) is removed, the stock directly facing selling is MSTR. Funds that fully replicate the relevant index usually need to sell the constituent stocks they hold; funds using sampling replication and other methods can adjust according to investment strategy, and different products will also differ in trading timing and volume. JPMorgan's projection model released in August for an earlier version of the digital asset proposal believed that if all types of funds, including coordinated benchmarks, fully exit, the upper limit of passive outflows could reach $2.8 billion. Strategy (MSTR.US)'s official quantitative floor is relatively more modest. Estimates show that passive funds tracking the index hold about 13 million MSTR shares, accounting for 3.1% of its total share capital, corresponding to a market value of about $1.57 billion at the current price. Based on the November 10 closing price of $121.07, this batch of shares is worth about $1.57 billion. The company believes this amount is lower than its then-statistical average daily trading volume and has limited impact on the business. But higher trading volume does not mean that new selling pressure can necessarily be absorbed by buyers near the original price. Some investors may trade ahead of list expectations, and the actual rebalancing price also depends on whether other buyers are willing to take the other side. Passive funds selling MSTR will not directly sell the Bitcoin on Strategy (MSTR.US)'s balance sheet, which is still held by the company, but a share price decline will transmit to financing capacity.
The deeper shock lies in the risk of a broken financing loop. The real damage of passive fund outflows to the crypto market lies in piercing the arbitrage loop that Michael Saylor built relying on U.S. equity liquidity. The coin-buying model of Strategy (MSTR.US) over the past four years has been viable entirely because its stock trading price has long carried a large premium to the underlying Bitcoin net asset value (mNAV). As long as the premium exists, the company can use at-the-market (ATM) issuance to sell common stock at high prices in the U.S. equity market, and even issue low-interest convertible bonds for U.S. dollar cash. These raised fiat currencies are injected one-way by management into the crypto spot market to sweep and build positions. The rapid expansion of Bitcoin reserves further stimulates speculative sentiment among retail investors and hedge funds, pushing up the stock premium and enabling the next, larger round of equity financing. From November 2 to 8, Strategy (MSTR.US) had just sold 2.05 million MSTR shares through this mechanism to raise $283.8 million, and then converted $81.9 million of that into 1,036 Bitcoins in spot. If removal brings sustained selling pressure, MSTR's stock price and valuation may be affected, and when the company issues shares in the future, the amount it can raise per share sold will also decline. To raise the same amount of money, Strategy (MSTR.US) may need to issue more shares, diluting existing shareholders' proportion. If investors also demand higher returns, the company's cost of financing through preferred stock or debt may also rise. Financing pressure further transmits to Bitcoin and would require the company to reduce future purchases, sell existing assets, or other investors to adjust positions simultaneously. Index removal alone cannot lead to the conclusion that Strategy (MSTR.US) must sell coins, nor can it calculate how much Bitcoin would fall as a result. However, Strategy (MSTR.US) has already sold Bitcoin this year. The company disclosed that about $431.8 million of proceeds from some Bitcoin sales this year were used to support preferred stock dividends and STRC repurchases; at the same time, the company continued to buy coins. As of November 8, its U.S. dollar reserve specifically used to support preferred stock dividends and debt interest was about $4.77 billion, with another $146.2 million in cash available for broader corporate purposes. Even Metaplanet, Upexi, and SharpLink have copied the financial engineering playbook of issuing stock to hoard tokens. The core weakness of these companies is highly consistent: weak cash generation from their main businesses and extreme reliance on asset premiums in public capital markets to sustain operations. MSCI's classification standard has set a clear isolation line for traditional financial markets, and the mainstream index system has formally cut off the unconscious supply of passive funds to shell-company coin-hoarding entities. If index compilers such as S&P and FTSE follow with similar rules one after another, the golden window for global listed companies to absorb crypto assets on a large scale through secondary-market equity leverage will face comprehensive constraints from the underlying traditional financial system.
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