- Bitcoin and overall crypto prices have dropped sharply, with bitcoin falling nearly 40% from its recent high.
- Strategy, a major bitcoin-holding company, faces potential removal from key stock indices, risking billions in passive fund outflows.
- JPMorgan analysts warn Strategy could lose up to $11.6 billion in passive investments if excluded from indices like MSCI.
- Michael Saylor, founder of Strategy, responded by emphasizing the company’s operating business and unique bitcoin-backed finance model.
- Changes to index inclusion rules could take effect in February 2026, with consultations open until the end of the year.
Bitcoin and cryptocurrency prices have dropped sharply in recent weeks. The Bitcoin Price declined from a peak of about $126,000 in October to just over $80,000. This drop has raised concerns over the stability of companies heavily involved in bitcoin holdings, especially the publicly traded firm Strategy.
According to analysts at JPMorgan, Strategy could face significant financial outflows if it is removed from major stock indices such as MSCI USA, Nasdaq-100, and MSCI World. The firm could lose roughly $2.8 billion from MSCI index exclusion alone, with a potential total of $8.8 billion more if other index providers follow. These changes could put considerable pressure on the company’s market value due to heavy ownership by passive index-tracking funds.
Strategy, formerly known as MicroStrategy, has experienced a nearly 60% drop in share price over the last six months. Analysts from Tagus Capital highlighted that the firm is vulnerable as the cryptocurrency market sell-off wipes over $1 trillion in value. They noted that Strategy’s market capitalization, close to $60 billion, includes about $10 billion held in passive funds and ETFs that track the indices.
MSCI announced last month that it is considering excluding companies for which digital assets like bitcoin make up 50% or more of total assets. These changes, if implemented, would affect index reviews beginning in February 2026. The consultation on these potential rules is open until the end of the year, with a final decision expected by January 15.
In response, Michael Saylor posted on X that “Strategy is not a fund, not a trust, and not a holding company,” adding, “We’re a publicly traded operating company with a $500 million software business and a unique treasury strategy that uses Bitcoin as productive capital.”
Saylor also stated that the company is developing a bitcoin-backed structured finance model that combines innovation in capital markets and software. He emphasized that index classification does not define the company’s mission, which remains focused on developing a digital monetary institution founded on sound money and financial innovation.
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