Bitcoin News Update: MSCI Index Removal Threatens to Topple MSTR's Fragile Structure
- MSCI's potential removal of MicroStrategy (MSTR) from major indices risks triggering $8.8B in passive outflows, worsening its fragile financial position. - JPMorgan warns index exclusion would damage MSTR's valuation credibility and hinder capital raising amid Bitcoin's 30% drop and collapsing stock premium. - MSTR's reliance on high-yield preferred shares has backfired as yields rise to 11.5%, while MSCI's recalibration of float metrics sparks sector-wide uncertainty. - The January 15 decision could res
JPMorgan analysts have cautioned that an upcoming decision by
According to the bank’s November 20 report, approximately $9 billion of Strategy’s market value is tied up in passive investment products that follow these indices. Should MSCI remove the firm, it could spark outflows of around $2.8 billion, with total losses potentially reaching $8.8 billion if other index providers follow suit. Such an action would not only erode the company’s valuation but also hinder its ability to secure new funding, JPMorgan’s analysts stated. “Losing a spot in major indices would damage the company’s reputation and cast doubt on Strategy’s access to equity and debt markets,” they wrote
This warning comes as Strategy’s share price has already dropped more than 60% from its highest point, mirroring the broader downturn in the crypto sector and declining investor trust.
MSCI has not provided any comments regarding upcoming index adjustments,
The consequences for Strategy are critical. The company’s previously high premium over its Bitcoin reserves has disappeared, and it now faces a cash crunch as its preferred shares trade at a discount. JPMorgan analysts noted that being included in major indices has long quietly supported market confidence, attracting passive investment and signaling reliability to large investors.
The impact could reach beyond just Strategy. MSCI’s decision may alter the environment for companies holding digital assets, which have struggled to balance innovation with mainstream acceptance. Similar firms are already selling tokens or taking on debt to survive, while
With the January 15 deadline drawing near, investors are watching closely for any changes to MSCI’s methodology and for signs of how Strategy will handle its financial challenges. For now, the market is in a state of uncertainty, with the outcome
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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