Shares of Michael Saylor‘s Bitcoin treasury company Strategy fell 6.49% on Thursday, closing at $114.41, a day after MSCI confirmed the company’s removal from its global equity indexes and amid a broader cryptocurrency market sell-off.
On Wednesday, MSCI confirmed that Strategy would be removed from its global equity indexes after the Nov. 30 market close, a move that could trigger selling by funds tracking the benchmarks. JPMorgan previously estimated that the exclusion could result in roughly $2.8 billion in selling pressure.
Ryan Kirkley, CEO of Global Settlement Network, told Cointelegraph that MSCIs decision could help distinguish Bitcoin treasury companies from traditional operating businesses and limit indirect cryptocurrency exposure for passive investors.
“Index inclusion meant ordinary passive investors, like someone holding a global index fund in their pension, were getting leveraged Bitcoin exposure they never chose. MSCI just fixed that,” he said.
Kirkley added that MSCIs decision also raises broader questions about whether Bitcoin treasury companies should be classified alongside traditional operating businesses.
MSCI has said publicly what many people in institutional finance have been saying privately for a while: buying an asset and holding it isn‘t an operating business. It’s a fund that doesnt follow fund rules.
In its Aug. 31 response to MSCIs proposed rules, Strategy argued that the changes were a pretext for targeting digital asset treasury companies. It also downplayed the potential financial impact, saying MSCI-linked funds held approximately 13 million of its shares, representing just 3.1% of its basic shares outstanding.
The stocks decline coincided with a broader cryptocurrency market sell-off. Bitcoin traded near $71,340 as of 4:08 p.m. ET on Thursday, down 4.3% over the past 24 hours, according to CoinGecko data. The total cryptocurrency market capitalization declined 3% to around $2.49 trillion.