MSCI is removing bitcoin's biggest corporate holder from its equity indexes

Strategy closed at US$114.41 on Thursday, down 6.49% and at its lowest since August. MSCI confirmed that the company leaves the MSCI USA Index and its broad US indexes at the close of 30 November.

The test MSCI has written is a simple one. A company with at least half of its total assets in digital currency is now treated as an investment fund, and a fund does not belong in a share index. Strategy is the first company cut under the rule.

Index funds that track those benchmarks have to sell. Estimates of the forced selling start at about US$1.6 billion, and JPMorgan has put it at US$2.8 billion. Michael Saylor's company has bought most of its bitcoin by issuing new shares.

Chart: Strategy's assets swelled. Its market value shrank. Total assets at each year end and market value, in US$bn on one scale. Assets were US$77.2bn at the end of September; the latest value predates Thursday's fall. — This story’s chart of the day.

Japan's Metaplanet and the smaller Upexi go at the same time, and the ether holder SharpLink sits on a watchlist. Bitcoin fell about 4% on Thursday to around US$71,500. Strategy's shares are down 49% over the past year.

The short version

Strategy has been reclassified as a fund, so the money that held it only because the index did has to go. The 30 November close is the deadline for that selling, and after it the company needs another way to pay for bitcoin.

This story ran in Nvidia Without Jensen Friday 13 November’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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