MSCI review results are now in.
MicroStrategy (MSTR) has confirmed that it will be removed from the MSCI Global Standard Index.
The change takes effect after the market closes on November 30.
Japan's Metaplanet will also be removed.
Passive index funds tracking the benchmark will be forced to sell their shares.
Estimates of the scale of the selling vary.
Previous estimates put the liquidation at as much as $2.8 billion. JPMorgan believes that if other indexes follow suit, outflows could reach nearly $8.8 billion.
MicroStrategy itself is taking it in stride, saying passive funds hold just 3.1% of its shares—less than the average daily trading volume.
After the removal, passive funds will have to sell all their MSTR shares, but MicroStrategy won't need to sell a single Bitcoin it holds.
Potential effects on BTC markets:
First: panic and sentiment
People could easily mistake this for MicroStrategy being forced to dump its Bitcoin, triggering short-term panic selling.
Second: scaling back Bitcoin purchases
Previously, MicroStrategy used the premium on its highly valued stock to aggressively issue debt and new shares to buy Bitcoin. Pressure on its share price could directly slow the pace of its future purchases.
Third: front-running
Institutions usually act in advance.
$MC
MicroStrategy (MSTR) has confirmed that it will be removed from the MSCI Global Standard Index.
The change takes effect after the market closes on November 30.
Japan's Metaplanet will also be removed.
Passive index funds tracking the benchmark will be forced to sell their shares.
Estimates of the scale of the selling vary.
Previous estimates put the liquidation at as much as $2.8 billion. JPMorgan believes that if other indexes follow suit, outflows could reach nearly $8.8 billion.
MicroStrategy itself is taking it in stride, saying passive funds hold just 3.1% of its shares—less than the average daily trading volume.
After the removal, passive funds will have to sell all their MSTR shares, but MicroStrategy won't need to sell a single Bitcoin it holds.
Potential effects on BTC markets:
First: panic and sentiment
People could easily mistake this for MicroStrategy being forced to dump its Bitcoin, triggering short-term panic selling.
Second: scaling back Bitcoin purchases
Previously, MicroStrategy used the premium on its highly valued stock to aggressively issue debt and new shares to buy Bitcoin. Pressure on its share price could directly slow the pace of its future purchases.
Third: front-running
Institutions usually act in advance.
$MC