MSCI’s Proposed Index Changes May Trigger $15B Crypto Sell-Off

The cryptocurrency market has been under steady pressure since October, a period that has weighed heavily on overall sentiment. This fragile environment risks worsening if Morgan Stanley Capital International (MSCI) proceeds with its proposal to remove crypto treasury companies from its benchmark indexes. Such a move would force funds that track MSCI benchmarks to adjust their holdings, leading to mandatory sell-offs of these firms. Analysts estimate this could trigger up to $15 billion in cryptocurrency sales, intensifying market strain.

Potential Market Impact of MSCI’s Proposal

A coalition opposing MSCI’s planned index changes, Bitcoin For Corporations, has cautioned that the exclusion of crypto treasury companies could result in significant outflows from the sector, projecting $10 billion to $15 billion in potential sales. Their assessment is based on a verified preliminary list of 39 companies, collectively holding a float-adjusted market capitalization of $113 billion.

Within this group, 18 are existing MSCI constituents scheduled for removal, representing $98 billion in float-adjusted value, while 21 non-constituents, with $15 billion in float-adjusted value, face permanent exclusion.

The group highlighted JPMorgan’s analysis, which indicates that if Strategy were removed from MSCI indexes, it could experience outflows of approximately $2.8 billion. Strategy’s total market capitalization is estimated to be between $50 billion and $56 billion, with around $9 billion held by passive index-tracking funds. The company alone represents nearly three-quarters (74.5%) of the total float-adjusted market value on the preliminary list, amounting to $84.1 billion of the $113 billion. Taken together, potential outflows from all impacted companies could reach around $11.6 billion, pointing to the possibility of significant stress on the cryptocurrency market.

Industry Leaders Rally Against the Proposal

Several high-profile figures in the crypto industry have expressed their support for MSCI’s reconsideration. Michael Saylor, Executive Chairman of Strategy, and Simon Gerovich, President of Metaplanet, are among those backing Bitcoin For Corporations’ petition, which has gathered 1,268 signatures, reflecting broad industry concern.

The group criticized MSCI’s use of a 50% total-assets threshold, which could exclude companies solely for holding Bitcoin or other digital assets. They argued that the proposed method misrepresents how these companies actually function. Rather than being passive investment vehicles, they run their operations fully, including staff and client management, while keeping proper financial records. Viewing them as existing solely to hold digital assets creates a distorted picture of their business reality.

Market Response to MSCI’s Proposed Changes

In October, MSCI reached out to investors to get their input on whether companies holding most of their assets in cryptocurrency should remain in its benchmark indexes. Since these benchmarks influence passive investment funds, inclusion or removal can significantly affect a company’s ability to attract funding. MSCI is scheduled to announce its final decision by January 15, with any approved changes set for implementation in the February 2026 Index Review.

Many key players in the industry have voiced objections to the proposal. Nasdaq-listed Strive urged MSCI to allow market forces to determine whether companies holding Bitcoin should remain in passive investment portfolios, emphasizing that consistent treatment across all asset classes is vital to maintaining the credibility of any equity benchmark. Strategy, the largest company holding Bitcoin on its balance sheet, also raised objections, noting that the proposal could bias against cryptocurrency as an asset class and contradict MSCI’s role as a neutral standard-setting organization.