The shoe has dropped. MSCI confirmed this morning: Strategy (MSTR) will be removed from the index after the market closes on November 30. The reason boils down to one thing: its 850,000 bitcoins weigh too heavily on the balance sheet, while its software business is too small, making it a “non-operating company.”
First, let’s be clear—don’t let the headlines scare you: being removed from an index doesn’t mean being delisted. Nasdaq trading will continue as usual, and nobody is forcing Strategy to sell its coins. Not a single one of its 850,000 BTC needs to be touched.
The real trouble is on the funding side. JPMorgan estimates that passive funds will need to sell about $2.8 billion worth of MSTR by November 30. Strategy’s own estimate is more conservative: index-tracking funds hold about 13 million shares, worth $1.59 billion at yesterday’s closing price of $122.35. The stock also fell 1.5% after hours. Once that money leaves, Saylor will have less firepower to issue shares and buy more bitcoin.
Even more painful are these numbers: BTC is now just above $73,000, already below Strategy’s average cost of $75,456, leaving its 850,000 coins with an unrealized loss on paper. The flywheel used to work like this: the stock traded at a premium, the company issued shares to buy bitcoin, and rising bitcoin prices then pushed the stock higher. Now the premium is gone, and the index door has closed too. The flywheel can’t turn.
So this really has little to do with bitcoin itself—the coin is still the same. What’s changing is that the path of “borrowing other people’s money to buy bitcoin” is getting narrower and narrower.
What do you think? With those $2.8 billion in index-fund buyers gone, where will Saylor get the money for his next bitcoin purchase?
$MSTR $BTC
First, let’s be clear—don’t let the headlines scare you: being removed from an index doesn’t mean being delisted. Nasdaq trading will continue as usual, and nobody is forcing Strategy to sell its coins. Not a single one of its 850,000 BTC needs to be touched.
The real trouble is on the funding side. JPMorgan estimates that passive funds will need to sell about $2.8 billion worth of MSTR by November 30. Strategy’s own estimate is more conservative: index-tracking funds hold about 13 million shares, worth $1.59 billion at yesterday’s closing price of $122.35. The stock also fell 1.5% after hours. Once that money leaves, Saylor will have less firepower to issue shares and buy more bitcoin.
Even more painful are these numbers: BTC is now just above $73,000, already below Strategy’s average cost of $75,456, leaving its 850,000 coins with an unrealized loss on paper. The flywheel used to work like this: the stock traded at a premium, the company issued shares to buy bitcoin, and rising bitcoin prices then pushed the stock higher. Now the premium is gone, and the index door has closed too. The flywheel can’t turn.
So this really has little to do with bitcoin itself—the coin is still the same. What’s changing is that the path of “borrowing other people’s money to buy bitcoin” is getting narrower and narrower.
What do you think? With those $2.8 billion in index-fund buyers gone, where will Saylor get the money for his next bitcoin purchase?
$MSTR $BTC
