JPMorgan noted that Strategy's (MSTR.US) stock price has largely priced in the risk of being excluded from major indices like MSCI. The upcoming decision by index provider MSCI could instead serve as a catalyst for the stock, even if its removal triggers passive fund outflows. MSCI is considering excluding companies holding Bitcoin or other digital assets as treasury assets from its indices and has sought feedback from the investment community.

MSCI stated: "MSCI proposes to exclude companies with digital asset holdings accounting for 50% or more of total assets from the MSCI Global Investable Market Indexes." The consultation period runs until December 31, with a final decision expected by January 15, 2026.

Strategy CEO Phong Le said Tuesday that the company has initiated a "communication process" with MSCI. Chairman Michael Saylor added Wednesday that the firm is engaging with MSCI regarding its potential exclusion. Currently, Strategy is part of the Nasdaq 100, MSCI USA, and MSCI World indices.

JPMorgan analysts highlighted in a November 21 report that about $9 billion of Strategy’s market cap is tied to passive holdings through ETFs and mutual funds tracking major benchmarks. They warned: "If MSCI proceeds with the exclusion, Strategy could face $2.8 billion in outflows… Should other index providers follow suit, total outflows might reach $8.8 billion."

Since November 21, Strategy’s stock has dropped roughly 20%, bringing its market cap close to the value of its Bitcoin holdings. JPMorgan now argues that the negative impact of potential exclusion is mostly reflected in the stock price.

The bank stated: "We believe any downside to Strategy’s stock or Bitcoin from an MSCI exclusion would be limited, as this risk is already overpriced. Conversely, a favorable decision by January 15 could trigger a rebound to pre-October 10 levels for both."

JPMorgan also reiterated its volatility-adjusted Bitcoin-to-gold ratio model, suggesting Bitcoin could theoretically reach nearly $170,000 in the next 6–12 months. While speculative, this underscores potential upside ahead of MSCI’s ruling.

Since 2020, when co-founder Michael Saylor launched Bitcoin acquisitions as an inflation hedge, Strategy has raised billions via equity and fixed-income securities. However, liquidity concerns have intensified as its stock plunged alongside Bitcoin, limiting its ability to issue new shares while facing high-interest obligations on perpetual preferred stock.

With $60 billion in crypto holdings but limited cash, fears of forced digital asset sales have added pressure to an already fragile, illiquid market. Phong Le noted Monday that the Bitcoin "whale" might sell crypto if needed to repay debt, triggering a Bitcoin sell-off before a rebound Tuesday–Wednesday.

Traders attributed Bitcoin’s recovery to SEC Chair Paul Atkins’ planned "innovation waiver" for digital asset firms and Vanguard’s decision to allow crypto-heavy ETFs and mutual funds on its platform. At press time, Bitcoin dipped slightly to $93,113.10.