Bitcoin Giant Strategy Could Shed Billions If Removed From Stock Indices: JPMorgan

JPMorgan analysts warned that the exclusion of MicroStrategy (MSTR) from global finance indices, particularly MSCI, could result in significant outflows, potentially totaling $2.8 billion. If other indices follow suit, the outflow could increase to $11.6 billion. This situation stems from a recent sharp decline in MSTR’s stock price, exacerbated by Bitcoin's price fall. Concerns over MSCI’s proposal to remove companies whose primary assets are Bitcoin or other cryptocurrencies, specifically if they hold over 50% in these assets, are leading to a notable concern among investors. The company, noted for its substantial Bitcoin holdings, is experiencing a market value decline, with a significant drop in its premium compared to its Bitcoin assets. Analysts emphasize that significant involvement from index-focused funds means that exclusion from major indices would negatively impact MSTR’s attractiveness to large investors, reducing trading volumes and liquidity. Moreover, the added pressure from the current bearish sentiment surrounding Bitcoin makes the future outlook for MSTR increasingly uncertain.

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