MSCI has set its sights on treasury companies like Strategy.
The new rules take effect in November. If Strategy and Metaplanet are removed, index-tracking funds will have to sell their shares. MSTR’s share price will come under pressure, the premium on its BTC holdings will narrow, and its next round of share-based financing will become more expensive.
Strategy has been able to keep buying crypto over the years thanks to a cycle:
its share price trades at a premium, it raises funds, then buys more BTC.
When GBTC traded at a discount in 2022, capital first flowed out of crypto-holding vehicles, and only later put pressure on BTC. MSTR has no redemption mechanism, so it won’t sell its coins immediately because of an index adjustment, but new buying could slow down.
On November 11, first look at the removal list, then at MSTR’s premium. It’s still a couple of steps too early to say Strategy will dump its holdings.
The new rules take effect in November. If Strategy and Metaplanet are removed, index-tracking funds will have to sell their shares. MSTR’s share price will come under pressure, the premium on its BTC holdings will narrow, and its next round of share-based financing will become more expensive.
Strategy has been able to keep buying crypto over the years thanks to a cycle:
its share price trades at a premium, it raises funds, then buys more BTC.
When GBTC traded at a discount in 2022, capital first flowed out of crypto-holding vehicles, and only later put pressure on BTC. MSTR has no redemption mechanism, so it won’t sell its coins immediately because of an index adjustment, but new buying could slow down.
On November 11, first look at the removal list, then at MSTR’s premium. It’s still a couple of steps too early to say Strategy will dump its holdings.