In recent months, Strategy (formerly known as MicroStrategy), a major player in the Bitcoin (BTC) treasury space, faces a critical situation that could result in its exclusion from the MSCI Index. This potential exclusion is not just a significant financial risk for the company itself but could also reverberate across the entire cryptocurrency industry. Experts predict that this move might result in a staggering $9 billion loss in demand for the company’s shares.

Understanding the Industry-Wide Consequences of Strategy Exclusion

In October, MSCI proposed the removal of companies with digital assets comprising over 50% of their total assets from its global benchmarks. The rationale was that these firms resemble investment funds, which are traditionally excluded from such indexes. However, companies like Strategy argue that this view is unfairly biased against the cryptocurrency sector, as many are operational firms offering innovative solutions.

Currently, MSCI is undergoing a public consultation. If they move forward with excluding Digital Asset Treasury (DAT) companies, it could set a precedent for other index providers to follow.

Kaasha Saini, head of index strategy at Jefferies, suggests that the conversation extends beyond MSCI, touching on the broader eligibility of DATs in equity indexes. Asset managers could control up to 30% of a large-cap entity’s free float, leading to potentially significant outflows if such companies are removed from major indexes. This poses a precarious situation for the DAT sector, which often relies on stock sales to finance token acquisitions.

Potential for Major Outflows from Strategy

In response to the potential MSCI exclusion, Strategy’s CEO Phong Le and co-founder Michael Saylor addressed the matter in a public letter. They estimated that this move could lead to $2.8 billion in stock liquidations, potentially chilling the entire industry. Excluding DATs might bar them from the $15 trillion passive investment market, severely impacting their competitive edge.

Analysts at TD Cowen have estimated that around $2.5 billion of Strategy’s market value is tied to MSCI, with an additional $5.5 billion at risk if other indexes follow suit. JPMorgan’s analysis indicates that if MSCI excludes Strategy, the company could face $2.8 billion in outflows, escalating to $8.8 billion if dropped from additional indexes like the Nasdaq 100.

Beyond Strategy, MSCI’s preliminary list includes 38 companies potentially at risk, with a combined issuer market cap of $46.7 billion as of September 30. This includes Capital B from France, another firm investing in Bitcoin. Alexandre Laizet, director of Bitcoin strategy at Capital B, notes that while current passive fund holdings in their shares are limited, access to passive flows is crucial for future expansion.

Matt Cole, CEO of US-based Bitcoin buyer Strive, which is not facing exclusion, suggests that the proposals have largely been factored into market valuations. He adds that on a long-term basis, this could raise the cost of capital for all Bitcoin treasury companies.

As of this writing, Strategy’s stock, trading under the ticker symbol MSTR on Nasdaq, was valued at $165, marking a 4% increase ahead of the week’s trading close.

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Recently, Matt Hougan from Bitwise expressed confidence in the company’s strategy, emphasizing that MicroStrategy is unlikely to sell its Bitcoin holdings. This reassurance comes amid speculation about the possible impact of the company’s exclusion from MSCI indexes. If such an exclusion occurs, it could potentially cause MicroStrategy’s stock to dip below its net asset value (NAV), raising concerns about forced Bitcoin sales.

MicroStrategy Bitcoin Strategy Under Scrutiny

The heart of the issue lies in MSCI’s ongoing consultation to decide whether to exclude “digital asset treasury companies” from its Global Investable Market Indexes. Companies like MicroStrategy, where Bitcoin constitutes over 50% of their assets, are directly impacted by this decision. Notably, Bitcoin represents an astonishing 99% of MicroStrategy’s enterprise value.

The consultation period is slated to conclude by the end of the year, with a final decision expected by January 15. Any resulting changes would likely be implemented in February. Meanwhile, Michael Saylor has been actively engaging with MSCI to argue for the company’s continued inclusion in these indexes.

Financial Resilience and Strategic Positioning

MicroStrategy’s financial health appears robust, with $1.4 billion in cash reserves sufficient to cover 18 months of interest payments, estimated at $800 million annually. The first major debt conversion is not due until 2027, and with $60 billion worth of Bitcoin, there seems to be no immediate pressure to liquidate assets. Saylor’s control over 42% of voting shares underscores his influence in maintaining a long-term Bitcoin holding strategy.

Historically, even during stock price declines, Saylor has refrained from selling Bitcoin, indicating that internal pressures to liquidate are minimal. This steadfast approach aligns with the company’s “never sell” philosophy.

“Last Resort” Scenario

MicroStrategy, also known as Strategy, is recognized as the world’s largest corporate holder of Bitcoin, with approximately 650,000 BTC as of December 2025. Despite adopting a “never sell” stance, recent market conditions have raised concerns about the potential necessity of selling Bitcoin.

CEO Phong Le mentioned that selling Bitcoin would be a “last resort” if the company’s mNAV falls below 1x and raising new capital through equity or debt markets is unfeasible. This highlights the company’s commitment to preserving its Bitcoin reserves unless absolutely necessary.

As market players continue to watch MicroStrategy Bitcoin holdings, the company’s strategies and financial resilience will be critical in navigating potential challenges. Michael Saylor’s leadership and conviction in Bitcoin’s long-term value remain pivotal in sustaining the company’s approach.

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