One new MSCI rule, and Saylor’s Bitcoin empire could be kicked out of global indexes.
MSCI, one of the world’s largest index providers, announced on Thursday (October 15) that “non-operating companies” will not be eligible for the MSCI Global Investable Market Indexes. The rule has two steps: first, screen for substantial operating assets; then, apply five financial ratio tests. Failing four of the five means exclusion. The final list will be announced on November 11, and the changes will take effect at the close on November 30.
The rule is aimed squarely at Strategy ($MSTR ): it holds 848,250 bitcoins (about $69.67 billion), and has essentially become a Bitcoin-holding fund. JPMorgan estimates that if it is removed, passive funds tracking MSCI will sell about $2.8 billion worth of shares. MSCI’s May simulation already singled out Strategy and Japan’s Metaplanet, with SharpLink and Ton Strategy among those on the watchlist.
Price action: $MSTR opened sharply lower on Friday, briefly plunging to 134.11 intraday and closing at 136.83, down 9.56% for the day on significantly higher volume of about 31.77 million shares. It edged up slightly after hours to 137.00 (+0.12%). The same day, the Nasdaq fell 2.15% and the S&P 500 dropped 1.09%—the stock badly underperformed the broader market. Meanwhile, Bitcoin hovered around 81,300, down about 1% and barely moved: this selloff was about “index eligibility,” not the price of Bitcoin.
Support and resistance: resistance at 146.83 (Friday’s intraday high), then 151.29 (Thursday’s close); support first at 134.11 (Friday’s intraday low), then the round-number level of 130.
Scenario A: Strategy is not on the November 11 list (existing constituents get a two-year grace period) → the bad news is out of the way, and the share price rebounds above 146.83.
Scenario B: It is ultimately removed → passive funds are forced to rebalance and sell before November 30, putting further pressure on the share price, with 130 as the first level to watch.
I’m cautiously bearish and staying on the sidelines: the potential $2.8 billion of selling pressure is hanging overhead, so there’s no need to catch a falling knife before the list is announced. What would prove me wrong: Strategy isn’t on the November 11 list, or $MSTR climbs above 151.29 on strong volume—in either case, this post is wrong.
⚠️Just my personal rambling; this is not investment advice.
#MSTR #MSCI #Bitcoin
MSCI, one of the world’s largest index providers, announced on Thursday (October 15) that “non-operating companies” will not be eligible for the MSCI Global Investable Market Indexes. The rule has two steps: first, screen for substantial operating assets; then, apply five financial ratio tests. Failing four of the five means exclusion. The final list will be announced on November 11, and the changes will take effect at the close on November 30.
The rule is aimed squarely at Strategy ($MSTR ): it holds 848,250 bitcoins (about $69.67 billion), and has essentially become a Bitcoin-holding fund. JPMorgan estimates that if it is removed, passive funds tracking MSCI will sell about $2.8 billion worth of shares. MSCI’s May simulation already singled out Strategy and Japan’s Metaplanet, with SharpLink and Ton Strategy among those on the watchlist.
Price action: $MSTR opened sharply lower on Friday, briefly plunging to 134.11 intraday and closing at 136.83, down 9.56% for the day on significantly higher volume of about 31.77 million shares. It edged up slightly after hours to 137.00 (+0.12%). The same day, the Nasdaq fell 2.15% and the S&P 500 dropped 1.09%—the stock badly underperformed the broader market. Meanwhile, Bitcoin hovered around 81,300, down about 1% and barely moved: this selloff was about “index eligibility,” not the price of Bitcoin.
Support and resistance: resistance at 146.83 (Friday’s intraday high), then 151.29 (Thursday’s close); support first at 134.11 (Friday’s intraday low), then the round-number level of 130.
Scenario A: Strategy is not on the November 11 list (existing constituents get a two-year grace period) → the bad news is out of the way, and the share price rebounds above 146.83.
Scenario B: It is ultimately removed → passive funds are forced to rebalance and sell before November 30, putting further pressure on the share price, with 130 as the first level to watch.
I’m cautiously bearish and staying on the sidelines: the potential $2.8 billion of selling pressure is hanging overhead, so there’s no need to catch a falling knife before the list is announced. What would prove me wrong: Strategy isn’t on the November 11 list, or $MSTR climbs above 151.29 on strong volume—in either case, this post is wrong.
⚠️Just my personal rambling; this is not investment advice.
#MSTR #MSCI #Bitcoin