The largest Bitcoin treasury firm could see $2.8 billion in passive fund outflows if removed from major indices.
Michael Saylor, the billionaire founder and executive chairman of Strategy (Nasdaq: MSTR), pushed back against JPMorgan’s warning that the company could be removed from major stock indices such as the MSCI USA Index due to Bitcoin’s volatility.
In a post on X on Friday, Saylor stressed that “Strategy is not a fund, not a trust, and not a holding company. We’re a publicly traded operating company with a $500 million software business and a unique treasury strategy that uses Bitcoin as productive capital.”
To date, Strategy holds 641,693 Bitcoin (BTC), which is worth $52.77 billion at the token’s current price of $83,800. Strategy is currently the largest public company holding Bitcoin, which has experienced major volatility in recent weeks, falling from roughly $125,000 in mid-October.
Saylor explained that this year alone, Strategy has completed five public offerings of digital credit securities – $STRK, $STRF, $STRD, $STRC, and $STRE – representing over $7.7 billion in notional value. The company also launched Stretch ($STRC).
“Funds and trusts passively hold assets. Holding companies sit on investments. We create, structure, issue, and operate,” Saylor added. “Our team is building a new kind of enterprise—a Bitcoin-backed structured finance company with the ability to innovate in both capital markets and software.”
He also emphasized that index classification does not define the company, noting that the team’s conviction in Bitcoin remains strong and their mission to “build the world’s first digital monetary institution on a foundation of sound money and financial innovation” remains unchanged.
Saylor’s comments come as Strategy faces the risk of being removed from major indices such as MSCI USA and Nasdaq 100. Analysts at JPMorgan Chase warned that exclusion could lead to a loss of liquidity, higher funding costs, and reduced investor interest, Bloomberg reported earlier this week.
“While active managers are not obligated to follow index changes, exclusion from major indices would certainly be viewed negatively by market participants,” JPMorgan analysts said in a note.
MSCI’s decision is expected by Jan. 15, and as much as $2.8 billion could potentially exit if the company is dropped, Bloomberg revealed.
Bitcoin’s recent swings come amid a broader market downturn, with major digital assets falling alongside the world’s largest cryptocurrency. Ethereum (ETH) has dropped 41% over the past three months to $2,780.55, while XRP has fallen 35% to $1.97.
Meanwhile, MSTR stock is currently trading at $173, down 43% over the past month.
Source: https://thedefiant.io/news/tradfi-and-fintech/michael-saylor-defends-strategy-as-msci-index-risk-looms
