The deletions take effect at the close of trading on November 30, and the screen that caught all three companies never mentions bitcoin. Index funds hold about 3.1% of Strategy's shares by the company's own August count, and nothing in the rule asks Strategy to sell a coin.
MSCI has deleted Strategy from its USA Index and Metaplanet from its Japan Small Cap Index, in a quarterly review the index provider published on Wednesday shortly after 5pm in New York. The Block reported the filings the same evening, and Cointelegraph and Bitcoin Magazine separately read MSCI's addition and deletion lists. The deletions take effect at the close of trading on November 30.
Strategy's removal from the MSCI USA Index also takes it out of the MSCI World and ACWI composites that index feeds into, according to Bitcoin Magazine's account of the review documents. Cointelegraph and Bitcoin Magazine both record Upexi as a deletion as well, which Bitcoin Magazine places in the USA Micro Cap Index. Sharplink, an ether treasury company, was not among the November small-cap deletions, and Cointelegraph described it as sitting on a watchlist.
The screen that caught them does not mention bitcoin. MSCI adopted a methodology on October 15 for non-operating companies, which asks first whether a company's operating assets amount to at least half its total assets. A company that fails that test is then measured against five financial ratios, and four or more flags make it ineligible for the Global Investable Market Indexes. Bitcoin Magazine's reading of the small-cap list has the same screen deleting Yellow Cake from the UK Small Cap Index and Skel Fjárfestingafélag from an Iceland frontier markets small cap index.
None of the timing was a surprise. When MSCI confirmed the rule last month, the schedule this review has now followed was already reported: the list of affected securities on November 11, with deletions effective at the close of November 30. What the review settled was the contents of that list, which MSCI had not committed to in advance. It offered no company-specific explanation for any of the deletions.
A deletion forces funds that track those indexes to sell the shares. It does not require Strategy to do anything with the 845,050 bitcoin it reported holding at the end of August at an average cost of $75,412 a coin. The company has made that point itself. In an August letter to MSCI it said funds tracking the global investable indexes held about 13 million of its shares, or 3.1% of basic shares outstanding, less than one day's trading volume, and that a deletion would have no meaningful impact on its business.
The larger figure in circulation is older. JPMorgan analysts put the passive selling at roughly $2.8 billion, with up to $8.8 billion more if other index providers followed MSCI, and both Cointelegraph and Bitcoin Magazine note that the estimate was struck against MSCI's earlier proposal to exclude digital asset treasury companies outright rather than the operating-assets screen MSCI actually adopted. MSCI has published no figure of its own. The two numbers do not measure the same thing in any case: at the $119.06 a share The Block recorded in after-hours trading on Wednesday, the 13 million shares Strategy counted come to about $1.5 billion, against an estimate JPMorgan made at an earlier share price and for a rule MSCI did not adopt.
The share reaction was modest, and the readings differ. The Block put Strategy down 2.6% after hours at $119.06, while Cointelegraph, reading later in the same session, had it down 1.65%. Metaplanet closed down 2.53% at 231 yen in Tokyo before MSCI published, so Wednesday's Japanese session carried none of the news.
Strategy has fought the treatment for months rather than this particular list. Michael Saylor and Phong Le have called MSCI's proposed approach to digital asset treasuries discriminatory, and the company has argued that the index provider was importing a policy judgment into index construction, and that exclusion would cost MSCI its standing as a neutral benchmark. That argument lost on the rule in October and has now lost on the list.
The deletions land on a weak tape rather than a strong one. Bitcoin fell below $74,000 on November 9, under the average price Strategy paid for its holdings, and US spot bitcoin exchange-traded funds have recorded net outflows for five straight sessions, including $299.9 million on November 11. The index selling arrives into that, though none of the three accounts of the review attributes a move in the bitcoin price to it.
Getting back in is slower than getting out. MSCI's rule bars a non-constituent from being added if it fails the screen in either of its two most recent annual filing periods, while a sitting constituent is removed only when it fails in both. A deleted company therefore needs two clean annual filings to qualify again, which makes re-entry a question of what its balance sheet looks like across two reporting years rather than what its share price does between now and the end of the month.
