MSCI shoe drops: Strategy officially kicked out of index; $2.8B in passive selling won’t hit until Nov. 30
Bottom line: The shoe dropping ≠ all the bad news being priced in. Don’t treat “the shoe has dropped” as a bullish signal and chase the stock. The selling pressure hasn’t arrived yet; it takes effect at the Nov. 30 close.
What happened:
· MSCI confirmed its final list: Strategy (MSTR) will be removed from its global indexes as a “non-operating company,” effective at the Nov. 30 close
· JPMorgan estimates that passive funds tracking the indexes will need to sell about $2.8 billion worth of MSTR shares
· MSTR fell 0.8% after hours and is down about 20% year to date, now trading around $120; $BTC is around $74,100, holding above its 200-day moving average at $73,163
What the bulls are saying:
· News accounts are sticking to the facts, and the market reaction is calm—this was largely priced in after the new rules came out on Oct. 15
· Index funds are selling shares, not coins. Strategy holds about 849,000 $BTC and has no obligation to sell; there’s no direct selling pressure on the coins themselves
· Being removed from an index ≠ being delisted from Nasdaq; MSTR will continue trading as usual
What the bears are saying:
· The $2.8 billion is real passive selling pressure. MSTR’s discount is likely to deepen further before Nov. 30; in mid-October, its market cap had already fallen to 0.84 times the value of its crypto holdings
· The real risk comes later: if the discount keeps widening, Strategy’s ability to raise capital could be drained. That’s when it might be forced to sell its coins
My take:
$BTC itself isn’t threatened by this. The risk is a chain reaction—MSTR is the crypto market’s biggest “out-in-the-open bull,” and its removal from the index effectively tells passive investors that “crypto treasury companies aren’t legitimate companies.” Before Nov. 30, every MSTR bounce is a chance to reduce your position. Don’t buy the dip.
No change to my $BTC plan: Until it reclaims $75,000–$75,500, treat bounces as relief rallies. A close holding above $73,163 would be the first step toward a bottom; if it fails to hold, watch $70,000.
Bottom line: The shoe dropping ≠ all the bad news being priced in. Don’t treat “the shoe has dropped” as a bullish signal and chase the stock. The selling pressure hasn’t arrived yet; it takes effect at the Nov. 30 close.
What happened:
· MSCI confirmed its final list: Strategy (MSTR) will be removed from its global indexes as a “non-operating company,” effective at the Nov. 30 close
· JPMorgan estimates that passive funds tracking the indexes will need to sell about $2.8 billion worth of MSTR shares
· MSTR fell 0.8% after hours and is down about 20% year to date, now trading around $120; $BTC is around $74,100, holding above its 200-day moving average at $73,163
What the bulls are saying:
· News accounts are sticking to the facts, and the market reaction is calm—this was largely priced in after the new rules came out on Oct. 15
· Index funds are selling shares, not coins. Strategy holds about 849,000 $BTC and has no obligation to sell; there’s no direct selling pressure on the coins themselves
· Being removed from an index ≠ being delisted from Nasdaq; MSTR will continue trading as usual
What the bears are saying:
· The $2.8 billion is real passive selling pressure. MSTR’s discount is likely to deepen further before Nov. 30; in mid-October, its market cap had already fallen to 0.84 times the value of its crypto holdings
· The real risk comes later: if the discount keeps widening, Strategy’s ability to raise capital could be drained. That’s when it might be forced to sell its coins
My take:
$BTC itself isn’t threatened by this. The risk is a chain reaction—MSTR is the crypto market’s biggest “out-in-the-open bull,” and its removal from the index effectively tells passive investors that “crypto treasury companies aren’t legitimate companies.” Before Nov. 30, every MSTR bounce is a chance to reduce your position. Don’t buy the dip.
No change to my $BTC plan: Until it reclaims $75,000–$75,500, treat bounces as relief rallies. A close holding above $73,163 would be the first step toward a bottom; if it fails to hold, watch $70,000.