- MSCI’s proposed exclusion could force crypto treasury companies to liquidate up to $15 billion in digital assets.
- Strategy faces the largest impact with $2.8 billion in potential outflows, representing 74.5% of the affected market cap.
The potential removal of crypto treasury firms from MSCl’s indexes by Morgan Stanley Capital International is estimated to throw the market into a frenzy to a large extent. Various industry organizations are cautioning that if the policy is carried out, involuntary sell-offs might total up to $15 billion.
The policy is aimed at those enterprises that hold a crypto-based bank balance for the most part, which means a possible change in how companies use digital assets.
Market Impact and Industry Pushback
BitcoinForCorporations is estimating outflows in the range of 10 to 15 billion dollars based on their initial analysis of 39 companies that have been affected. These companies, in total, stand for a float-adjusted market capitalization of 113 billion dollars across the world markets.
One of the instances where the Saylor’s Strategy is most likely losing to outflows is emphasized by JPMorgan analysts who estimate a staggering 2.8 billion dollars worth of potential outflows just for the Saylor’s Strategy. The strategy, which represents 74.5% of the total affected market capitalization, is, therefore, the most susceptible one.
The exclusion put forward is highly influential, as MSCI indexes are the main reference for passive fund managers in determining the necessary holdings of their portfolios. Firms that are eliminated from these indices will no longer have access to the automatic investment inflows of index-tracking funds that manage assets worth trillions. A wave of such selling by these funds would therefore exacerbate the pressure on cryptocurrency markets to decline further, which have been falling for almost three months in a row.
Opposition from the industry side keeps on increasing against the balance sheet metric that MSCI intends to use for its classification decisions.
BitcoinForCorporations says that one single metric is not enough to show the reality of business operations, how revenue is generated, or the relationships with customers. At the last tally, the movement has gathered one thousand two hundred sixty-eight signatures of people who are against the proposal.
Strive, a company traded on Nasdaq, has also become vocal against the decision by MSCI to permit the market players to independently decide investment preferences. The company Strategy in a like manner, attacked the regulation as unfairly discriminatory towards crypto assets as a class of assets rather than a neutral indexing. Opponents argue that MSCI ought to keep the divisions in line with the companies’ models and characteristics of operations rather than the composition of the balance sheet.
MSCI made public its consultation in October and is aiming to have its final decisions ready by the 15th of January next year. The changes, if any, will be put into effect during the Index Review of February 2026. The investment community is on hold, awaiting the decision of MSCI, which has the potential of being the main driver behind the shift of corporate treasuries strategies in relation to digital assets.
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Source: https://thenewscrypto.com/msci-crypto-treasury-exclusion-could-trigger-15b-market-selloff/
