Bitcoin News Today: Index Exclusion Could Unravel MSTR's Bitcoin-Backed Model

Major Institutions Face $5.4B in MSTR Outflows Amid MSCI Exclusion Risks

According to a JPMorgan analysis

MicroStrategy (MSTR), the publicly traded Bitcoin treasury company, is bracing for potential billions in capital outflows if major index providers exclude it from equity benchmarks, according to a JPMorgan analysis. The bank warned that MSCI's proposed rule change-removing companies with over 50% of assets in digital assets-could trigger up to $8.8 billion in forced selling if adopted, with additional fallout if other index providers follow suit. MSTR's inclusion in the Nasdaq 100, MSCI USA, and MSCI World indices exposes roughly $9 billion in passive fund holdings to mechanical liquidation should the rule take effect.

The warning has intensified scrutiny on Michael Saylor's strategy of leveraging Bitcoin as a corporate asset. Saylor, in a recent public statement, defended MSTR's status as an operating company with a $500 million software business, arguing it is distinct from passive funds or trusts. "We are a Bitcoin-backed structured finance enterprise," he emphasized, highlighting $7.7 billion in digital credit offerings this year as evidence of the company's active business model. However, JPMorgan analysts contend that MSTR's valuation has increasingly aligned with its Bitcoin holdings, with its market-implied net asset value (mNAV) ratio now hovering near 1.1, indicating the stock trades only marginally above the value of its crypto reserves.

The potential delisting risk has already destabilized MSTR's stock, which has fallen 67% from its November 2024 peak and dropped 5.7% pre-market on Friday. JPMorgan strategist Nikolaos Panigirtzoglou noted that exclusion from MSCI indices would not only trigger immediate selling but also erode institutional credibility and liquidity, complicating future capital raises. The company's preferred shares, which yield 15% after recent price declines, further underscore investor concerns about its ability to fund Bitcoin acquisitions and meet dollar-denominated dividend obligations.

The crypto community has pushed back against JPMorgan's analysis, with figures like real estate investor Grant Cardone and Bitcoin advocate Max Keiser calling for a retail-driven boycott of the bank. Cardone announced closing his JPMorgan accounts, while Keiser urged followers to "Crash JP Morgan and buy Strategy and BTC". Critics allege the bank is shorting MSTR, though JPMorgan has not confirmed such positions. The backlash has also reignited scrutiny over JPMorgan's historical ties to Jeffrey Epstein.

MSCI's final decision on the index rule is due January 15, 2026 according to analysis. If implemented, the exclusion would mark a structural shift for MSTR, which has relied on index inclusion to amplify its Bitcoin exposure through passive fund flows. Saylor remains defiant, insisting MSTR's model is "not a fund, not a trust, and not a holding company", but analysts warn the company's financial engineering may struggle to sustain its valuation if forced to operate outside major benchmarks.