MSTR to be "removed" from index, JPMorgan research report "unexpectedly caught in crossfire," crypto community calls for "resistance"
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MSTR to be "removed" from index, JPMorgan research report "unexpectedly caught in crossfire," crypto community calls for "resistance"
JPMorgan Chase warned in a research report that if Strategy is ultimately removed, it could trigger mandatory sell-offs totaling $2.8 billion.
Navigating Web3 tides with focused insightsAuthor: Zhao Ying
Source: Wall Street Insights
MSCI, a major index provider, has proposed removing companies with significant cryptocurrency holdings from its Global Investable Market Indexes, sparking strong opposition from the crypto community. Strategy, which holds a large amount of bitcoin, is directly affected, while JPMorgan has unexpectedly become a target of backlash for publishing a related research report.
MSCI recently announced a proposal to exclude so-called "digital asset treasury companies" holding more than 50% of their balance sheets in cryptocurrencies from its indexes, with the policy change expected to take effect in January 2026. JPMorgan shared this news in a research report and was immediately met with fierce criticism from the Bitcoin community, prompting calls from several crypto figures to "boycott" the financial services giant.
Nikolaos Panigirtzoglou and his team of JPMorgan analysts warned that if Strategy is ultimately removed, its valuation could face "significant pressure." The analysts estimate that around $2.8 billion of Strategy's approximately $59 billion market capitalization is held by funds explicitly tracking MSCI indexes. If the delisting takes effect, it could trigger mandatory selling worth $2.8 billion.
This index adjustment could set off a chain reaction. Excluded crypto treasury firms would lose passive fund inflows, forcing associated funds and asset managers to automatically sell their shares, potentially negatively impacting the broader cryptocurrency market.
Crypto Community Launches Boycott Campaign
JPMorgan became the focal point of crypto community anger due to its publication of the MSCI index adjustment research report.
Real estate investor and Bitcoin advocate Grant Cardone said on social media: "I just pulled $20 million out of Chase Bank and am suing them for credit card misconduct." Bitcoin advocate Max Keiser called out: "Crush JPMorgan, buy Strategy and Bitcoin."
The online boycott movement quickly escalated, highlighting the crypto community’s sensitivity toward interference from traditional financial institutions. Although JPMorgan merely relayed MSCI’s policy proposal, it has borne the brunt of collective resistance from the crypto space.
Strategy Founder Responds to Policy Change
Michael Saylor, founder of Strategy, broke his silence last Friday and responded to MSCI’s proposed policy change.
He emphasized: "Strategy is not a fund, not a trust, nor a holding company. Funds and trusts passively hold assets; holding companies sit on investments. We create, build, issue, and operate."
Saylor defined Strategy as a "Bitcoin-backed structured finance company," seeking to distinguish it from entities that passively hold assets. Strategy was included in the Nasdaq-100 Index in December 2024, which includes the 100 largest technology-related companies by market cap on the Nasdaq. Inclusion brought passive investment flows from funds and investors tracking the Nasdaq-100.
Market Impact of Index Removal
Under MSCI’s proposed new criteria, any treasury company with cryptocurrency comprising 50% or more of its balance sheet would lose eligibility for inclusion in its indexes. These firms would then face two choices: reduce their crypto holdings below the threshold to retain index eligibility, or lose passive fund inflows tied to market indexes.
JPMorgan analysts noted that speculation around this proposal may have contributed to recent downward pressure on Strategy’s stock price. Of the company’s roughly $59 billion market cap, about $9 billion is held by investment vehicles tracking various indexes.
The analysts warned that if crypto treasury companies affected by MSCI’s proposal are forced to sell suddenly, digital asset prices could be pressured downward. Passive mutual funds and ETFs tracking MSCI indexes would be compelled to sell the relevant stocks after the index adjustment takes effect, creating dual downward pressure on both corporate valuations and the broader cryptocurrency market.
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