Global index provider MSCI has officially adopted a new methodology that could remove Strategy (MSTR), Metaplanet, and Upexi from its MSCI Global Investable Market Indexes. The new methodology targets non-operating companies, specifically publicly traded firms that shift their primary business function into holding crypto assets on their balance sheets. This criteria shift immediately sparks risks of multi-billion-dollar stock sell-offs across global capital markets.
How Much Capital Could Face Forced Selling
JPMorgan analysts previously estimated that Strategy’s removal from MSCI indexes could trigger around $2.8 billion in forced selling. That selling pressure stems from passive fund managers replicating MSCI benchmark indexes, as passive asset managers are required to divest shares dropped from official constituent lists.
Strategy itself opposed the exclusion rules in August, though management assessed that the impact on market liquidity would remain limited. Strategy noted that MSCI index funds hold roughly 13 million shares, or 3.1% of basic shares outstanding - an amount representing less than a single day’s trading volume for the company’s stock.
Five-Ratio Rule and Watchlist
MSCI has set a phased implementation timeline: the final list of companies to be removed from the index will be announced on November 11, 2026, ahead of the policy taking effect on November 30, 2026.
MSCI’s evaluation framework is based on the proportion of operating assets and five financial ratios. Companies failing at least four of the five financial ratio tests will be dropped from the index after failing across two consecutive annual reporting periods.
Beyond the three companies slated for initial exclusion, MSCI also placed several other crypto firms on a watchlist for potential removal. The companies on the watchlist include Sharplink Inc (SBET), Ton Strategy Company (TONX), Solana Company (HSDT), and DeFi Development Corp (DFDV).
Direct Impact on Passive Investors
The Bitcoin Policy Institute highlighted the broader impact of MSCI’s new rules on the general public. Executive Director Conner Brown warned that removing crypto-holding companies forcibly strips crypto exposure from the standard portfolios of tens of millions of passive investors who rely on global index products.
For tens of millions of mutual fund and index ETF holders, MSCI’s decision sharpens a divide in the stock market: corporations choosing to accumulate crypto in their treasuries face the consequence of being ousted from the world’s passive investment baskets.
Reported via Cointelegraph.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
