JPMorgan Warns MSCI Decision Could Force Strategy (MSTR) Out of Top Equity Indices

JPMorgan has expressed concerns that Strategy's recent sell-off is driven primarily by fears of potential exclusion from major equity indices, rather than weaknesses in the cryptocurrency market itself. According to the bank, MSCI's upcoming decision on January 15 could lead to significant passive outflows amounting to $2.8 billion if it excludes Strategy from its indices. This could extend to $8.8 billion if other index providers follow suit. The firm, which relies heavily on digital assets for its treasury strategy, has already seen its market valuation and liquidity under pressure. JPMorgan analysts indicated that a negative ruling could further tether Strategy's valuation to its bitcoin holdings, undermining its credibility in equity and debt markets and possibly impacting its ability to raise capital. As of now, roughly $9 billion of Strategy's market capitalization is linked to passive investment vehicles tracking major indices, which has facilitated bitcoin exposure for a broader investor base.

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