Crypto-treasury companies are facing their deepest structural stress test to date, as fears of forced index outflows collide with one of the sharpest crypto drawdowns since the FTX collapse.
A new wave of pressure from global index provider MSCI has accelerated a sell-off that has already erased close to half the combined market capitalization of public firms holding corporate digital-asset treasuries.
Related: JPMorgan warns of MicroStrategy delisting risk from major equity indices
According to data from The Block, the sector's total market cap has plunged from $176 billion in July to just $99 billion, with Bitcoin, Ethereum and Solana all sliding sharply from their recent highs.
Now, with JPMorgan warning that Strategy (formerly MicroStrategy) could be expelled from major equity benchmarks, the sell-off is intensifying — and putting the entire "Bitcoin-on-Wall-Street" model under scrutiny.
What MSCI is, and why its decision matters
The MSCI USA Index, maintained by Morgan Stanley Capital International, is one of the world's most influential equity benchmarks. It tracks roughly 85% of the U.S. stock market, and companies included in the index benefit from access to billions of dollars in passive capital from ETFs and institutional portfolios.
JPMorgan's latest note warns that MSCI is weighing a new rule that would remove companies whose digital-asset holdings exceed 50% of total assets. Strategy sits at the extreme end of that criteria, with its balance sheet dominated by 649,870 BTC.
JPMorgan wrote:
"MicroStrategy is at risk of exclusion from major equity indices as the January 15th MSCI decision approaches."
The bank further warned:
"Outflows could amount to $2.8 billion if MicroStrategy gets excluded from MSCI indices and $8.8 billion from all other equity indices if other providers choose to follow."
Nearly $9 billion of Strategy's float is held by passive funds. Expulsion would trigger mechanical selling — not based on sentiment, but mandatory index-tracking rules.
This is the first time that global index providers have considered formal limits on crypto-heavy corporates, marking a potentially historic shift in how public markets treat digital-asset exposure.
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Saylor responds, "Strategy is not a fund"
Michael Saylor, founder and executive chairman of Strategy, pushed back sharply on the narrative that the company is little more than a Bitcoin holding vehicle.
In a statement, Saylor said:
"Strategy is not a fund, not a trust, and not a holding company. We're a publicly traded operating company with a $500 million software business and a unique treasury strategy that uses Bitcoin as productive capital."
Related: Michael Saylor responds to JPMorgan's MSCI delisting warning
Saylor noted that Strategy engages in capital-markets activity far beyond passive BTC buying. In 2025, the company executed five public offerings of digital credit securities, raising over $7.7 billion.
He also promoted the firm's new instrument Stretch ($STRC), calling it:
"a revolutionary Bitcoin-backed treasury credit instrument"
"that offers variable monthly USD yield to institutional and retail investors."
According to Saylor, index classification, whether MSCI keeps or removes Strategy — does not change the company's long-term mission:
"Our broader mission continues to center on building what we envision as the world's first digital monetary institution."
Yet despite Saylor's confidence, market pressure is rising.
Strategy shares have collapsed 40% over the past month and 68% from their record high, trading at $173.05, down another 2% at the time of writing.
If Bitcoin falls another 15%, Strategy's entire BTC position, acquired at an average of $74,433 — would be underwater.
Bitcoin's crash is adding fuel to the fire
Bitcoin's November drawdown has amplified the stress.
BTC has fallen from $126,000 to the low $80,000s, hitting its weakest level in seven months. Coinglass recorded $2.19 billion in total liquidations overnight, including $1.12 billion from Bitcoin alone.
Bloomberg analyst Mike McGlone warned Bitcoin now resembles its 2018 breakdown, stating the chart looks "similar to the last major unwind." He projected BTC could fall as low as $10,000 if the structure continues to weaken.
The sell-off began after the U.S. "missed" its October jobs report, triggering a global retreat from risk assets. BTC is now in what many analysts call the "extreme fear" zone.
This macro backdrop has compounded MSTR's decline — and created cascading losses across the DAT sector.
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Solana treasury stocks tank as much as 64% amid market rout
Solana-exposed public companies were hit with one of their sharpest sell-offs this quarter, with several names plunging more than 50% in a single session as SOL extended its November decline.
Across the board, equities holding Solana on their balance sheets—or operating Solana-linked businesses—finished the day deep in the red, with losses ranging from 7% to more than 63%.
Solmate (NASDAQ: SLMT)was the day's biggest casualty, crashing 63.73%to $2.10. The company, which lists Solana among its primary treasury assets, saw more than $18 million in volume as panic selling accelerated.
Other Solana-linked firms also fell sharply:
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iSpecimen (ISPC)dropped 16.96%to $0.421.
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Solana (HSDT)slid 13.56%to $3.25.
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Classover Holdings (KIDZ)declined 10.95%to $0.389.
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Upexi (UPXI)fell 8.18%to $2.47.
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Artelo Biosciences (ARTL)dropped 7.57%to $1.71.
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Sharps Technology (STSS)slipped 7.07%to $2.76.
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SOL Strategies (STKE)lost 6.25%to $2.10.
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Exodus (EXOD)dipped 2%to $14.19, despite its diversified BTC-ETH-SOL treasury.
Ethereum treasury company crashes
Bitmine is sitting on over $4.1 billion in unrealized ETH losses, while SharpLink faces nearly $500 million in paper losses — together accounting for the deepest drawdowns across all Strategic ETH Reserve entities.
Smaller Ethereum treasury companies like The Ether Machine (+$367M) and Bit Digital (+$37M) remain in profit, but most corporate treasuries are now underwater as ETH trades near $2,750.
Related: Popular North American company shuts down Bitcoin mining operations for AI
This story was originally reported by TheStreet on Nov 22, 2025, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
