Massive Outflows Expected for MicroStrategy Amid MSCI Exclusion Rumors

Tysons Corner, Virginia – A report from JPMorgan reveals potential outflows of up to $2.8 billion from MicroStrategy if global finance company MSCI excludes the Bitcoin treasury giant from its equity indices. The forecast suggests that the figure could reach as high as $11.6 billion if other exchanges follow suit.

The investment bank noted that a recent drop in MicroStrategy’s (ticker: MSTR) share price has been influenced more by concerns regarding the company’s potential removal from key indices rather than a decline in Bitcoin’s price. Analysts stated, “This index inclusion has enabled Bitcoin exposure to indirectly reach both retail and institutional investor portfolios.”

MSCI is currently considering a move to exclude companies whose main business involves accumulating Bitcoin or other cryptocurrencies, especially if such assets account for 50% or more of their holdings. The consultation period for this proposal is set to last until the end of the year, with a decision expected by January 15.

MicroStrategy, formerly known as Strategy, has been under pressure as Bitcoin’s value continues to decline sharply. The company’s market value is approximately $51 billion, operating with a $56 billion Bitcoin stockpile. This stockpile is referred to as its net asset value (mNAV), which has dropped from a premium of 2.7 last year.

Additionally, Executive Chair Michael Saylor faced rumors last week regarding the liquidation of parts of their Bitcoin holdings. Currently, MicroStrategy shares are down 5.1% at $177.13, and more than 40% in the past month, reflecting ongoing volatility.

JPMorgan’s analysts highlighted that index-focused funds own a significant portion of MicroStrategy shares. They added, “While active managers are not required to adapt to index changes, exclusion from major indices would be perceived negatively by market participants.” This potential change could adversely affect MicroStrategy’s ability to raise equity and debt in the future.

As of Thursday, Bitcoin traded around $87,100 after shedding 3.4% from Wednesday’s value and over 22% in the past month. Analysts attribute this decline partly to economic uncertainties including recent jobs data and a reduced likelihood of cuts in interest rates, which might support liquidity in digital asset markets.

In a recent prediction by Myriad, users anticipate only a 20% chance that Bitcoin will rise to $115,000 next, compared to a 20% drop to $85,000, reflecting a bearish sentiment among investors.