MSCI Treasury Exclusion: $15B Sell-Off Looms for Strategy (MSTR) and Crypto Proxies
MSCI’s proposed 50% digital asset cap threatens $15B in forced outflows, putting Strategy (MSTR) and crypto treasuries on the chopping block.
The Deadline: December 31
A $15 billion liquidity shock is forming on the horizon for corporate crypto holders. MSCI has extended its consultation on excluding "Digital Asset Treasury Companies" to December 31, 2025, a policy that would effectively purge companies like Strategy Inc. (formerly MicroStrategy) from its global indices. If enacted, passive funds tracking these benchmarks will be forced to liquidate billions in equity holdings by February 2026.
The market reaction has been preemptive and brutal. Strategy (MSTR) shares have drifted to $160.44 (-16% this month), dragging broader crypto-equity proxies down with them. Bitcoin (BTC) itself remains rangebound near $86,400, as traders price in the potential loss of a critical institutional bid.
The Mechanism: The 50% Cliff
MSCI’s proposal is surgical. It seeks to remove any entity where digital assets comprise 50% or more of total assets. The index provider argues these firms function as investment vehicles rather than operating businesses, distorting the "Corporate" classification of their indices.
The fallout numbers are concrete. Analysis from JPMorgan indicates Strategy (MSTR) alone faces $2.8 billion in forced passive outflows. The Bitcoin For Corporations (BFC) alliance estimates the total sector-wide impact at $10–$15 billion. This isn’t just paper losses. It is structural selling pressure that hits the order books immediately upon the February 2026 rebalancing.
The Pushback: ‘Strategy’ Draws a Line
The industry counter-offensive is underway. BFC announced this week that its coalition opposing the rule has surpassed 1,000 signatories. Their argument hits on the definition of an "operating company." Strategy generates revenue from enterprise analytics software, yet its balance sheet is dominated by its BTC treasury reserve.
“A single balance sheet metric cannot reflect whether a company is an operating business. The rule would remove companies even when their customers, revenue, operations, and business model remain [intact].” . Bitcoin For Corporations Statement
Institutional Implications
This is a battle for the classification of corporate treasuries. If MSCI proceeds, it sets a precedent that penalizes balance sheet innovation. Companies holding significant cash or real estate face no such caps. Only digital assets are targeted. For now, the market waits for January 15, 2026, when MSCI delivers its final verdict.
