• Strategy engages MSCI to keep MSTR in indexes, disputing forecasts of major outflows.
• MSCI weighs removing high digital-asset exposure firms; consultation runs through 2025.
• Strategy sets a $1.44B reserve, holds 650,000 BTC, and cuts 2025 targets below $90K.

Strategy is working to ensure its Class A stock, MSTR, remains inside MSCI’s global indexes. The move comes after MSCI’s continued assessment of digital-asset treasury activities and index eligibility. 

Michael Saylor said the company is in talks with the index provider during a consultation period. He also challenged predictions of big outflows in the event that MSCI drops MSTR from its benchmark group.

MSCI announced it had opened a consultation on whether to delete companies with large digital-asset exposure from its Global Standard Indexes. The procedure involves market participants and will be in place through the end of 2025. 

MSCI is exploring the extent to which digital-asset balance sheets need to be incorporated into the construction of its indices and if such exposure aligns with its current methodology.

Strategy’s MSCI Engagement

Strategy is in touch with MSCI about the review, Saylor said. He said he’s not convinced about JPMorgan’s estimates for withdrawals from passive funds. Bank analysts have indicated billions could leave if MSTR does, but Saylor said underlying estimates need more clarity.

MSTR joined MSCI’s key indices in May 2024. The addition took place at the height of last year’s surging price for Bitcoin. MSTR was singled out by MSCI as one of three largest entrants to its World Index set at the time. The company had already established a digital-asset treasury model and had amassed a substantial Bitcoin reserve by the time it joined the benchmark.

Also Read: Bitcoin Yield at Risk? Strategy Stock Diverges Sharply From BTC Asset Value

The MSCI World Index follows more than 1000 large and mid-cap companies in developed markets. That is closely watched by investors around the world. Numerous funds track or otherwise reference the index, a dynamic that can intensify the influence of membership for listed firms. By having all the Strategy funds in the index, it calibrated its market exposure to a large institutional audience.

2025 Slump Hits Bitcoin-Treasury Stocks

Many companies in the category saw sharp declines in their shares. And other firms like Strategy that have large holdings of Bitcoin were also feeling the power of market dynamics. As of mid-October, the enterprise values of some companies fell below the value of their Bitcoin holdings and raised new uncertainties for the industry.

Saylor discussed the volatility during an event in Dubai. Its equity is prone to hyper-reaction because its structure compounds Bitcoin’s swings, he said. He pointed out that Bitcoin declines tend to lead to larger percentage moves in the company’s stock.

Strategy just announced a fiscal reserve. The company established a $1.44 billion fund for the payment of preferred dividends and interest requirements. It also increased its Bitcoin holdings to 650,000 BTC. The company reduced a number of performance targets for 2025 after Bitcoin dipped under $90,000, reflecting the reality of today’s market.

Also Read: Strategy Buys Another 130 BTC as Michael Saylor Signals Renewed Accumulation