$2.8 billion worth of shares to sell, but not a single Bitcoin.
MSCI made the call last night: Strategy will be dropped from its indexes at the close on November 30. JPMorgan estimates that funds tracking the indexes will have to sell about $2.8 billion worth of shares. As soon as the news broke, many people’s first reaction was, “Strategy is going to sell its Bitcoin”—wrong. It’s the stock being dropped, not the 850,000 Bitcoin it holds. Index rules don’t require it to sell any Bitcoin.
The timing matters, too: the selling pressure won’t come today. It’s a mechanical rebalance at the close on November 30, already on the calendar a month in advance. Strategy has run the numbers itself: index funds hold just 13 million shares in total, or 3.1%—less than one day’s trading volume.
The real risk lies elsewhere: $BTC is now around $73,900, already below Strategy’s average cost of $75,500. Whether or not it gets dropped from the index only means one fewer passive buyer; whether Bitcoin can hold above its cost basis is what determines whether it can keep issuing shares to buy more Bitcoin.
Do you still think of MSTR as a leveraged Bitcoin play?
#风险拆解 $BTC #Strategy
MSCI made the call last night: Strategy will be dropped from its indexes at the close on November 30. JPMorgan estimates that funds tracking the indexes will have to sell about $2.8 billion worth of shares. As soon as the news broke, many people’s first reaction was, “Strategy is going to sell its Bitcoin”—wrong. It’s the stock being dropped, not the 850,000 Bitcoin it holds. Index rules don’t require it to sell any Bitcoin.
The timing matters, too: the selling pressure won’t come today. It’s a mechanical rebalance at the close on November 30, already on the calendar a month in advance. Strategy has run the numbers itself: index funds hold just 13 million shares in total, or 3.1%—less than one day’s trading volume.
The real risk lies elsewhere: $BTC is now around $73,900, already below Strategy’s average cost of $75,500. Whether or not it gets dropped from the index only means one fewer passive buyer; whether Bitcoin can hold above its cost basis is what determines whether it can keep issuing shares to buy more Bitcoin.
Do you still think of MSTR as a leveraged Bitcoin play?
#风险拆解 $BTC #Strategy