MSCI (MSCI) (Morgan Stanley Capital International) is threatening to trigger a massive $15 billion “forced selling” event that could bury the current crypto recovery under a mountain of institutional outflows. The index giant is currently consulting on a controversial proposal to exclude “crypto treasury” companies, firms that hold the majority of their assets in digital currency, from its global benchmarks. If implemented, the rule would effectively evict 39 companies with a combined float-adjusted market cap of $113 billion from the indices that passive funds are legally required to track.
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The impact would be centered squarely on Michael Saylor’s Strategy (MSTR), which accounts for a staggering 74.5% of the total market cap at risk. Analysts at JPMorgan (JPM) estimate that Strategy alone could face $2.8 billion in outflows if it is stripped of its MSCI status, a move that would force massive institutional funds to dump shares regardless of the company’s actual financial performance.
Michael Saylor Champions the “Neutral Arbiter” Standard
The pushback against MSCI has been swift, led by a coalition called BitcoinForCorporations, which has already gathered over 1,200 signatures to halt the proposal. In a formal letter to the index provider, Strategy argued that the policy change would bias MSCI against crypto as an asset class, rather than the company acting as a neutral arbiter of market value. Critics argue that using a single balance sheet metric to disqualify a company is an “unfair alchemy” that ignores revenue, operations, and business models.
“The rule would remove companies even when their customers, revenue, operations, and business model remain unchanged,” the group stated, urging MSCI to withdraw the plan before its January 15 final decision. Asset manager Strive has also joined the defense, urging MSCI to “let the market decide” which companies belong in passive portfolios rather than imposing a top-down ideological filter.
Is Strategy a Good Stock to Buy?
Turning to TipRanks, analyst data shows Wall Street remains firmly optimistic about Strategy (MSTR) despite the looming “index execution” and the volatility in Bitcoin. In total, 14 analysts have weighed in over the past three months, and the consensus rating sits at Strong Buy. Out of these calls, 12 analysts call the stock a Buy, two say a Hold, and none recommend a Sell.
The average 12-month MSTR price target comes in at $481.08, which implies roughly 200% upside from the recent close. Institutional bulls argue that even if MSCI relinguishes the stock, the demand from Nasdaq 100 inclusion and the massive $27 trillion pool of traditional capital seeking Bitcoin exposure will eventually create a permanent floor for the asset.
