JPMorgan Chase: Strategy Stock Faces Potential Outflow of Billions If Delisted From Index

On Thursday, November 21st, JPMorgan stated in a report that if the global index provider MSCI were to exclude Bitcoin "treasury giant" MicroStrategy (MSTR) from its stock indexes, the potential outflow of funds could reach as high as $2.8 billion. If other exchanges and index compilers were to follow suit, the total outflow could amount to $11.6 billion. The analysis indicated that the recent decline in MSTR's stock price, coupled with this year's overall weak performance, is mainly due to market concerns about its possible removal from MSCI, as well as from indexes like the Nasdaq 100 and Russell 1000, rather than because of Bitcoin's own price drop. The analyst wrote, "It is precisely because of being included in these indexes that Bitcoin's exposure has indirectly entered retail and institutional investors' portfolios. However, as MSCI is now considering removing MicroStrategy and other companies mainly holding digital assets from stock indexes, this previous indirect exposure may be reversed." MSCI is evaluating a proposal to exclude companies whose main business is holding Bitcoin or other crypto assets and where such assets account for more than 50% of their balance sheet. MSCI stated last month that this "consultation" will continue until the end of this year, and a final decision will be made by January 15th.