A new report has warned that a potential decision by MSCI to exclude digital asset treasury firms could force billions of dollars in crypto-linked selling. This could add pressure to markets already facing a downturn.
Should Investors Be Ready for a Sell-Off Amid MSCI Review?
In a latest report published by BitcoinForCorporations, the cumulative value for the firms potentially impacted could range between $10 billion and $15 billion. These figures are calculated using the float-adjusted market cap of the firms under evaluation, whose totals are over $110 billion.
Strategy is approximately three-quarters of the affected market cap on its own. Analysts at JPMorgan estimate the company could see as much as $2.8 billion of its funds flow out if the company is disqualified. It is the largest potential source of selling pressure.
For all companies combined, investor outflows are projected to be $11.6 billion in cumulative terms. This is a situation that may continue to pressure crypto prices for almost three consecutive months in the market.
Currently, MSCI is assessing whether investment entities whose primary balance sheet component is digital assets should be allowed to be part of its global investable indexes. The deadline was extended in October, with a decision to be made on January 15, 2026.
To that end, a preliminary list reveals 39 stocks that are being considered, whether or not they are current constituents. Some of the most noticeable stocks include Strategy, as well as other crypto-exposed stocks like Riot Platforms, Marathon Digital Holdings, and Sharplink Gaming.
As a reaction to this proposed change, Strategy has begun to negotiate with MSCI in hopes of impacting this decision. The company’s Chairman, Michael Saylor, has confirmed that this is currently happening before the deadline in January.
Industry Resistance to the Proposal Continues to Build
Criticisms against the index’s method have also grown lately. The analysts believed that it is too simplistic to base index membership solely on a balance sheet threshold.
“The rule would remove companies even if their customers, revenue, and operations remain unchanged,” according to the report.
The group has called on MSCI to withdraw the proposal. They also shared that they should only make classifications based on the fundamentals of the businesses.
Crypto-asset manager Bitwise has also shown their support for crypto treasuries. They believe adding personal opinions to the usual rules for selecting components of the Index is not suitable. They also said this could cause problems with transparency.
Strategy CEO Phong Le has also expressed his doubts as to how companies with commodities such as oil in their treasury reserves have avoided being held up to the same standards. Meanwhile, Strategy has retained its place in the Nasdaq 100 following the latest index rebalancing.
Source: https://coingape.com/another-crypto-sell-off-ahead-msci-review-sparks-15b-market-crash-fears/
