MSCI may exclude Strategy and other crypto companies from its indexes

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MSCI may exclude Strategy

Which companies are at risk?

MSCI previously identified Strategy (MSTR) among the companies that could be removed from its indexes under the new criteria. Meanwhile, Sharplink (SBET), Ton Strategy Company (TONX), Solana Company (HSDT) and DeFi Development Corp. (DFDV) have been placed on a watchlist for further assessment.

Exclusion from the indexes could trigger large-scale stock sales, as investment funds tracking MSCI indexes would have to adjust their portfolios. This could put additional pressure on share prices and reduce demand from passive investors.

In September, Bitcoin Policy Institute Executive Director Conner Brown warned that such a decision would effectively remove a company from the default investment portfolios of tens of millions of people who had never chosen to sell its shares.

How the new rules will work

MSCI plans to assess companies based on the composition of their operating assets and five financial ratios. If a company fails at least four of the five criteria, it could be deemed ineligible for index inclusion.

However, a transition mechanism will apply to companies already included in the indexes. As a general rule, they must fail the screening process over two annual reporting periods before being removed.

MSCI plans to publish the final list of companies to be excluded on November 11, with the changes taking effect on November 30, 2026.

What this means for Strategy

JPMorgan analysts previously estimated that Strategy's exclusion from MSCI indexes could trigger approximately $2.8 billion in stock sales. However, that estimate was based on MSCI's earlier proposal concerning digital asset companies, rather than the final version of the rules.

In August, Strategy opposed the proposed changes but also argued that their potential impact should not be overstated. According to the company, funds tracking the MSCI Global Investable Market Indexes hold approximately 13 million Strategy shares, representing 3.1% of its total basic shares outstanding.

Strategy emphasized that these holdings represent less than one day's trading volume. Therefore, the company believes that even a potential exclusion from the indexes would not necessarily cause major market disruption.

How Strategy differs from other companies

Strategy, founded by Michael Saylor, has become the largest corporate holder of Bitcoin. Unlike most publicly traded companies that use cryptocurrencies as an additional investment tool, Strategy has made Bitcoin accumulation the cornerstone of its financial strategy.

The company raises capital by issuing shares and debt instruments, using the proceeds to purchase Bitcoin. Strategy continues to develop enterprise software, but its cryptocurrency reserves are the main driver of its investment appeal and stock performance.

This approach has become a model for other companies with cryptocurrency reserves, including Metaplanet and Upexi. However, it has also attracted the attention of index providers seeking to distinguish traditional operating businesses from companies whose activities primarily involve holding investment assets.

As a reminder, Strategy most recently purchased 250 Bitcoin.

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