Strategy (MSTR.US) officially removed from the MSCI index—what does this mean for crypto-related stocks?

According to Zhitong Finance APP, major index provider MSCI has completed its first round of review under new rules, officially removing Strategy (MSTR.US) from MSCI indices. This marks the first practical implementation of MSCI’s new framework targeting so-called “non-operating companies”—as defined by MSCI, these are companies whose value primarily comes from holding assets rather than from operating businesses. In the same batch, Japan’s Metaplanet and Upexi were also confirmed for removal, while Ethereum treasury company Sharplink was placed on the watchlist.

After the announcement, Strategy’s share price fell by nearly 4% during after-hours US trading. On the Stocktwits platform, retail investor sentiment toward the stock recovered from “extremely bearish” to “bearish,” and discussion activity rose from “low” to “normal.”

How the New Rules Work: Two-Step Screening, Five Tests

MSCI officially adopted this framework in mid-October. The screening process consists of two steps: First, the company is assessed to determine whether it possesses sufficient operating assets. Companies that pass are retained directly, while those that do not move to the second step—five financial ratio tests. Triggering four out of the five results in classification as a non-operating company, causing the company to lose index eligibility.

The five tests are: operating assets accounting for less than 20% of total assets; operating expenses less than 5% of total assets; negative operating cash flow; fair value changes in non-operating assets exceeding 5% of total assets; reliance on financing exceeding 20%.

For companies like Strategy, this set of tests is practically tailor-made barriers—bitcoin is its overwhelmingly primary asset, the scale of its software business is relatively small, making it easy to trigger multiple metrics simultaneously. MSCI has also included a buffer provision: only a “sustained change in business structure” will trigger reclassification, so one-off or temporary failures to meet criteria do not constitute grounds for exclusion. However, the watchlist mechanism means the buffer is limited—companies that fail to meet the criteria for two consecutive annual screening periods will also be removed; while for treasury crypto companies not in the index, failing just one out of the last two screenings makes them ineligible.

Evolution of the Rules: From “50% Red Line” to Five Tests

This round of removals was not a sudden move, but the result of over a year of rule evolution at MSCI. In October 2025, MSCI first proposed excluding companies where digital assets make up more than 50% of total assets, and during the consultation period applied temporary restrictions to companies such as Metaplanet—not increasing the number of shares included in the index, disallowing new entries, and postponing size category adjustments. At that time, J.P. Morgan estimated that removing Strategy alone could result in approximately $2.8 billion in passive fund outflows.

In January this year, MSCI took a step back: it announced it would temporarily not exclude treasury companies based on the 50% digital asset threshold, but instead launched a broader consultation—the question broadened from “how to handle crypto treasury companies” to “how to classify companies that primarily hold investments rather than operate businesses.” In August, MSCI proposed the financial tests and used May 2026 data for a simulation: Strategy, Metaplanet, and uranium investment company Yellow Cake were marked as “to be removed,” while Sharplink and others entered the watchlist. The new rules were approved on October 15, took effect after the close on November 30, and the final list was announced on November 11—marking this round of execution.

It is noteworthy that the rules have spillover effects: Yellow Cake, which was on the simulated list, did not appear on the final removal list, replaced by Upexi—in other words, the new rules are not limited to bitcoin treasury companies, but also capture “holding-type companies” beyond crypto. In fact, since January this year, MSCI has deliberately de-emphasized the “crypto” label, redefining the issue as the neutral classification of “non-operating companies”—gold, commodities, or any company mainly holding assets could in theory be measured by the same criteria. This makes the new rules more than just a crypto narrative, but a precedent-setting decision on how index compilation rules treat “asset-holding public companies.”

What This Means for Crypto Treasury Stocks

For the entire “treasury company” sector, this marks a structural turning point. Strategy’s response reflects this group’s stance: “Digital assets are assets. Index providers should reflect the market, not decide what assets companies are allowed to hold.” The company insists it has a software business, financial operations, and bitcoin-collateralized credit instruments, qualifying it as a normal operating company, and criticizes MSCI’s methodology as “arbitrary.”

But the market impact is very real: passive funds and ETFs tracking MSCI indices are required to rebalance and sell any components removed from the index. Although the previous $2.8 billion outflow estimate was based on the old 50% threshold plan, the transmission logic remains valid under the new rules. Smaller treasury companies face greater pressure—for example, Metaplanet’s simulated free float market cap was about $654 million in May, making it much more vulnerable to liquidity shocks from passive fund outflows compared to Strategy.

The watchlist mechanism also harbors a second wave of pressure: Sharplink has already missed one annual screening, and if it fails the next, it will be the next case of removal. For treasury crypto companies not yet in the index, the new rules effectively close the window for entry over the coming months. From a funding perspective, “being excluded from the index” means these companies lose an important source of passive demand, and their core business model—“issuing stock to buy coins,” where a rising stock price enables further issuance and purchases—may experience a break in this flywheel.

Potential Impact on Bitcoin

The key factor in understanding the impact on bitcoin is this: index rules do not force any company to sell bitcoin, only stocks are sold. The bitcoin held by Strategy will not automatically enter the market due to index adjustments.

The real transmission channel is different. Strategy’s model for buying bitcoin is to issue common or preferred shares when its stock price is above its bitcoin net asset value, using the funds raised to buy more bitcoin. Premium is the fuel for this flywheel, and passive inflows from its position as an index component help support this premium. Once passive funds exit, the demand base for the stock is weakened, the premium (or even the current discount) is further pressured, leading to increased financing costs and limited issuance capacity, reducing the potential amount of future bitcoin purchases.

Analysts from the decentralized infrastructure network ZEROBASE have issued warnings from this perspective: loss of index-driven demand could potentially cut off the share issuance that funds bitcoin purchases.

The real risk lies not in the immediate future, but in two areas:

First, structural spillover. In 2025, individual investors are expected to be net sellers of about 696,000 bitcoins, while enterprises, investment funds, and governments combined will have bought nearly 1 million coins—corporate treasuries are among the most visible marginal buyers in this market. If the “digital asset treasury” model is broadly excluded from mainstream indices, smaller companies like Metaplanet and Upexi will face even greater demand shocks, and incremental buying from the entire cohort could contract—not just for Strategy itself.

Second, whether other index providers will follow suit. TFTC has speculated about scenarios in which FTSE Russell and S&P Dow Jones follow, but as of publication, neither has announced related consultations. This is the largest tail risk for bitcoin price in this incident—if the rules spread from one index provider to the entire system, the constraint would no longer be limited to one company’s financing ability but would affect an entire channel for asset allocation.