MSCI adopts de-indexing rules that can destroy the strategy

Strategy, Metaplanet and Upexi have already been identified for delisting under this method, and MSCI will announce its final list on November 11.

Index provider MSCI has adopted new rules that could see Strategy, Metaplanet and Upexi removed from its global listings, while several other cryptocurrency treasury companies face possible debarment.

MSCI announced on Thursday that it will adopt a method proposed in August that disqualifies "non-operating companies" for inclusion in MSCI's global equity market indices.

MSCI previously identified the strategy (MSTR) among companies delisted under the "Non-Performing Companies Method". Sharplink, Inc. (SBET), Ton Strategy Company (TONX), Solana Company (HSDT) and DeFi Development Corp. (DFDV) are among the companies placed on the "watch list" for possible removal.

The removal could force funds that track MSCI indices to sell shares in affected companies, potentially putting pressure on share prices and reducing demand for passive investments.

"It removes a company from the default portfolio of tens of millions of people that they never chose to remove," said Connor Brown, executive director of the Bitcoin Policy Institute, in September, outlining the consequences of excluding broad market indices from Strategy.

Under the new methodology, MSCI will evaluate companies based on their operating assets and five financial ratios. Companies that fail at least four of these five tests can be considered inappropriate. Companies included in this index typically must fail the screening process within two annual reporting periods before being removed.

According to MSCI, the final list of companies to be delisted will be published on November 11 and will take effect from November 30, 2026.

Analysts at JP Morgan previously estimated that Strategy's removal from MSCI's indexes could result in a $2.8 billion sale. The estimate was based on MSCI's previous digital asset proposal, rather than the rules approved on Thursday.

In August, Strategy disputed the changes, but downplayed the potential disruption, saying funds tracking MSCI's global equity market index held roughly 13 million shares, representing 3.1 percent of its core holdings. The firm said the holdings were less than a day's trading volume.