Quick Read
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MSCI's plan to classify Strategy as 'non-operating' sent MSTR stock down 9.6% to $137, while Bitcoin slipped just 1% to $81,548.
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Forced index-fund selling could unload roughly $2.8 billion in MSTR shares, but Strategy retains custody of its 848,250 BTC.
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Bitcoin's real exposure emerges only if a weaker MSTR stock price hampers Strategy's ability to raise capital and keep buying BTC.
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MSCI( NYSE: MSCI ), a well-known index provider followed by many passive investment funds, plans to classify companies like Strategy Inc.( NASDAQ: MSTR ) as "non-operating." This change would make them ineligible for MSCI's global indexes. As a result, Strategy could end up on a potential deletions list alongside Japan's Metaplanet, with final decisions expected by November 11, 2026, and removals starting on November 30.
After the news, Strategy's stock fell 9.6% to $137 on October 16 and has dropped 11.4% over the past week. Meanwhile, Bitcoin(CRYPTO: BTC) remained relatively stable, slipping just 1.0% in the 24 hours leading up to October 16 to $81,548. So, how might this index decision, concerning the largest corporate holder of Bitcoin, impact Bitcoin's price?
Why Is MSCI Targeting Strategy Inc.?
The controversy began with an MSCI proposal that would have excluded any company whose digital asset holdings made up more than 50% of its total assets. Strategy voiced strong opposition, describing this threshold as "discriminatory towards digital assets" and "arbitrary," according to Chief Financial Officer Andrew Kang during a February 5 earnings call.
Though MSCI retracted this proposal in January, the provider eventually initiated a broader consultation that led to the current "non-operating assets" test driving the potential removals. Strategy formally opposed the test, with Kang insisting that Strategy is "an operating company with a treasury balance sheet built upon a commodity," highlighting its 1,500-employee workforce and 2025 revenue of $477 million.
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While the company's software division generates consistent revenue—reporting $122.4 million in the second quarter (up 6.9% from the previous year), with subscription services growing by 54% to $62.9 million—most investors hold shares in Strategy primarily for its Bitcoin assets. The company holds 848,250 BTC, valued at about $69 billion at the current Bitcoin price, exceeding its $55.25 billion market cap.
However, the second quarter also posted a substantial net loss of $8.22 billion, mainly due to an $8.32 billion unrealized loss on Bitcoin, as fair value accounting requires the company to mark its holdings to market every quarter.
Index Funds Would Sell MSTR Shares, Not Bitcoin
Index funds are passive investments that mirror the holdings of the indexes they track. If Strategy is removed from the index, index funds would be required to sell their shares, which could trigger about $2.8 billion in forced selling, according to JPMorgan Chase( NYSE: JPM ).
While this selling would affect MSTR shares, it wouldn't directly impact Bitcoin. The shares would change hands between buyers and sellers, so Strategy would retain custody of its Bitcoin. Bitcoin prices would only be affected if the company decided to sell some of its holdings, and the current MSCI terms don't obligate any company to do so.
Michael Saylor, Strategy's executive chairman, expressed that the MSCI decision is "not that important to us," adding that MSCI manages "a fairly de minimis amount of capital." However, this perspective is expected, given that Saylor represents a company that could lose its index status. Traders, for their part, treated the news as a serious threat.
How the MSCI Change Could Still Affect Bitcoin
The main link between Strategy's stock and Bitcoin is the company's buying power. Strategy has heavily invested in Bitcoin, funding purchases through the sale of new shares and preferred stock. In the second quarter alone, it raised $8.41 billion through "at-the-market" offerings. In 2025, it raised $25.3 billion.
If the stock price declines and fewer index funds hold the shares, raising money could become more challenging. Strategy might need to issue a greater number of shares to acquire the same amount of Bitcoin. Furthermore, with an S&P credit rating of B-, far below investment grade, the company faces higher borrowing costs and limited access to bond funds that only deal in highly rated debt.
Additionally, Strategy has recently begun selling some of its Bitcoin. The company's board approved sales of up to $1.25 billion to support its USD Reserve, and it has already sold $218.4 million of Bitcoin this year. The reserve currently stands at $3.75 billion, enough to cover more than 2.1 years of preferred dividends and interest on its $6.7 billion in convertible debt.
However, the pressure on Bitcoin prices remains. Strategy's average purchase price is around $75,444 per Bitcoin, and Bitcoin's current $81,548 is only about 8% above it, while it trades 35.3% below its record high of $126,080 set on October 6, 2025. That said, Saylor previously reassured investors that falling below that cost threshold would not trigger any major actions, stating that Strategy has no "covenants or triggers" tied to its purchase price.
Will MSCI Dropping Strategy Hit Bitcoin's Price?
The MSCI change is primarily an issue for Strategy's stock rather than Bitcoin directly. Bitcoin's price may be affected only if the company significantly slows its buying or decides to sell its Bitcoin assets in the future.
The first clear test comes with MSCI's final list on November 11. If Strategy is on it and its reports after the November 30 removals show Bitcoin sales beyond the $218.4 million already sold this year, the index exit has reached the coin. If its purchases keep coming instead, the damage stays with MSTR shareholders.
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Contact editorial@247wallst.com for any questions or corrections.
