Strategy's (MSTR) BTC-buying model at risk after MSCI's index exclusion - CoinDesk
MSCI will remove Strategy, the largest publicly listed holder of bitcoin, from its global equity indexes after the close on Nov. 30 under new rules excluding nonoperating companies.
The index provider's decision follows the adoption of a new screen for 'non-operating' companies on Oct. 15, which also led to the exclusion of Tokyo-listed bitcoin treasury firm Metaplanet from the MSCI Japan Small Cap Index. Strategy currently holds 850,364 BTC worth approximately $62.6 billion.
Passive selling pressure
MSCI's indexes are baskets of stocks that many funds are mandated to copy. When a stock is excluded, funds tracking that index must sell their shares, creating selling pressure. BloFin Research estimates MSCI-tracking funds would need to sell about 13 million shares, roughly 3.1% of shares outstanding and less than one day's typical trading volume.
MSCI-tracking funds would need to sell an estimated 13M shares, roughly 3.1% of shares outstanding and less than one day's typical trading volume.
Impact on BTC purchases
The bigger concern is how this affects Strategy's Bitcoin accumulation model. The company relies heavily on capital raising to fund BTC purchases. Losing passive index demand could put further pressure on its mNAV premium, currently near 1.08x. When mNAV is above 1, investors pay more for shares than the company's bitcoin stash is worth.
Strategy's mNAV has already compressed from a 3.4x peak in November 2024 to roughly 1.08x as of now. In a recent filing, the firm raised $283.8 million by selling shares but used only $81.9 million toward bitcoin, with the majority going to buy back preferred stock.
Mixed analyst views
Markus Thielen, founder of 10x Research, believes the outcome is already priced in. 'With the NAV premium near 1.0, the stock offers less leverage to Bitcoin, and we expect it to keep underperforming,' he said. 'We don't expect any spillover into Bitcoin itself.'
Derin Olenik, an independent bitcoin analyst, sees a higher cost in terms of a blow to the narrative of institutions embracing BTC. 'This will be a major blow to the 'institutional adoption' narrative that the entire model is increasingly hinging on,' he noted.
Future outlook
Thielen suggests treasury companies need to act more like asset managers, putting their assets to work with yield strategies. Olenik was more blunt, calling the index exclusion 'good riddance' and advocating for 'Treasury 2.0' models that build Bitcoin infrastructure and drive network adoption rather than merely stacking coins.
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