The broader crypto market remains stuck in a steep downturn, with Bitcoin now down more than 30% from its October peak and over $1 trillion wiped from global valuations. As confidence weakens and selling intensifies, a new fault line is emerging, one driven not by price action but by traditional finance.
MSCI, one of the world’s most influential index providers, is reviewing whether crypto-heavy corporations should stay in its major equity benchmarks, a move that could hit the digital asset sector at one of its most vulnerable moments.
MSCI Review Raises Concerns for Crypto Treasury Firms
Digital asset treasury companies, firms that hold large amounts of Bitcoin or other cryptocurrencies as part of their core identity, are now under MSCI’s scrutiny. Investors have told MSCI that companies such as MicroStrategy, Riot Platforms, Marathon Digital, and Sharplink Gaming increasingly resemble investment vehicles rather than traditional operating companies. That distinction matters, as MSCI indexes generally exclude funds.
The review runs through December, but early signals suggest significant changes are likely. Analyst Shanaka Anslem Perera says MSCI’s preliminary decision points to MicroStrategy being removed from every major index on January 15, 2026. If confirmed, index funds and pension portfolios would be forced to unload the stock immediately, potentially triggering nearly $9 billion in automatic selling.
For companies whose valuations depend heavily on institutional inflows, even the uncertainty is adding to market stress.
Billions in Passive Flows at Risk
According to Bloomberg, JPMorgan estimates that MicroStrategy, now the world’s largest corporate holder of Bitcoin, could face around $2.8 billion in forced passive outflows if MSCI finalizes the exclusion. Nearly $9 billion of its market cap is tied to index-linked products.
MicroStrategy’s once-powerful flywheel buy Bitcoin, watch the stock rise, raise more capital, and buy even more BTC has slowed sharply. Today, the company’s valuation sits only slightly above the value of its Bitcoin reserves, reflecting fading investor enthusiasm amid Bitcoin’s extended correction.
Why MicroStrategy Is Facing Index Removal
MSCI’s rules are straightforward: companies with more than 50% of their assets in cryptocurrencies are considered funds, not operating businesses. MicroStrategy crossed that threshold months ago and now holds roughly 77% of its assets in Bitcoin, making its removal from the indexes almost unavoidable.
A Potential Wave of Forced Selling
With just 55 days remaining before index reconstitution, markets are bracing for impact. On January 15, index-tracking funds and pension managers must sell MicroStrategy automatically and without discretion. The stock, which once traded at a 2.5× premium over its Bitcoin holdings, now trades at around a 1.11× premium, showing that traders have already priced in the expected outflows.
As the crypto market searches for stability, MSCI’s structural shift could deliver another shock at a time when the sector can least afford additional pressure.
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FAQs
MicroStrategy may be removed because most of its assets are in Bitcoin, placing it outside MSCI’s criteria for traditional operating companies.
If removed, index funds would be required to sell the stock, potentially triggering large outflows and adding pressure during a weak market.
The review adds new uncertainty, and any forced selling could deepen market stress at a time when crypto prices are already falling.
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