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A bomb has been dropped by Wall Street investment banks - what will happen if MSCI really kicks MicroStrategy out of the index?
First, let's look at the numbers. Just with MSCI taking action, it can withdraw 2.8 billion dollars. What if the Nasdaq 100 and Russell 1000 followed suit? That would be a big scene, with a total potential evaporation of 11.6 billion dollars in funds.
Many people think that MSTR's recent decline is due to the instability of BTC prices, but that's not the case. The real killer is the market pricing in a risk in advance: this company may be collectively "delisted" from mainstream indices.
Why is this matter so important? Because in the past few years, countless passive investors have actually gained exposure to Bitcoin through index funds by "curved" buying - they invested in the index, which includes MSTR, and MSTR's holdings are all in BTC. Now this channel may be about to break.
MSCI is considering a new rule: if a company's balance sheet has more than 50% of its assets in cryptocurrencies, it will not be allowed to remain in the index. The final decision will be announced by January 15 of next year.
This is not just an index adjustment; it may be a reshuffling of the relationship between the crypto world and traditional financial systems.