Strategy shares may be removed from major stock indices

Index provider MSCI is finalizing new rules on how it classifies companies whose shares are included in MSCI USA, MSCI World, and the Nasdaq 100, according to JPMorgan analysts. MSCI proposes creating a new category for companies whose digital assets (Bitcoin, Ether, and other cryptocurrencies) make up more than 50% of their total asset value.

This category will be called Digital asset treasury companies. If a company is placed in this category, it will no longer be considered a “normal operating company” and will instead be viewed by MSCI as a “crypto fund in a corporate wrapper.” MSCI emphasized that its indices are designed for investors who want exposure to traditional businesses rather than a bet on cryptocurrency prices:

“If you buy an MSCI World ETF, you expect to get Apple, Nestlé, or Toyota — not a Bitcoin proxy. Securities of companies dominated by cryptoassets behave not like stocks but like derivatives tied to Bitcoin’s price. Their volatility, correlations, and risks are different, which distorts the purpose of MSCI indices. That’s why passive investors such as pension funds and ETFs should not get exposure to digital assets by default, without making a conscious decision.”

If MSCI removes Strategy from its indices, all ETFs and index funds holding the company’s shares will be forced to sell them within days — regardless of whether they support Michael Saylor’s Bitcoin strategy. This forced selling could push Strategy’s stock down by around 15% and trigger capital outflows of up to $8 billion, JPMorgan analysts estimate.

Earlier, American financier and investor Ray Dalio, founder of Bridgewater Associates, said that the main problem with Bitcoin is that it will never become a reserve asset for major governments.

See also: "Amina Bank Obtains License to Provide Crypto Services in Hong Kong"

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