JP Morgan Highlights MSCI Index Risk for Strategy
JP Morgan analysts say Strategy’s price drop is due to fears of MSCI removing it from their index. The concern is stronger than the impact of Bitcoin price changes. The warning came in a note on Wednesday.
Potential Outflows If Strategy Is Removed
Leading analyst Nikolaos Panigirtzoglou explained that if MSCI excludes Strategy, it could face $2.8 billion in outflows. If other index providers follow, this could rise to $8.8 billion. The analysts added that exclusion from major indices would be seen negatively by investors.
Strategy is part of the Nasdaq-100 and MSCI USA indices. Over $9 billion of its $50 billion market value is in funds tracking these benchmarks. This lets Bitcoin exposure enter many retail and institutional portfolios indirectly. Removal from these indices could reverse this exposure sharply.
MSCI Proposal and Its Impact on Strategy
On October 10, MSCI said it is considering excluding companies whose main business is Bitcoin or digital asset treasury management. This applies if such holdings are 50% or more of a company’s assets. The consultation lasts until December 31, with a decision expected by January 15, 2026. JP Morgan called this date “pivotal” for Strategy’s stock.
JP Morgan said losing index status would harm Strategy’s reputation. It could limit the company’s ability to raise money via equity or debt. It might also reduce stock liquidity and make it less attractive to large investors.
The recent drop in Strategy’s share price matches a slowdown in its Bitcoin buying. JP Morgan warned that MSCI’s decision could push Strategy’s value close to its Bitcoin holdings, reducing any premium it currently enjoys.
However, Strategy recently increased Bitcoin buying. On Monday, it purchased 8,178 BTC, its biggest buy since July.
Strategy shares dropped 5.02% on Thursday. Its market NAV has fallen to 1.05, according to CoinGecko.
