The most BEARISH signal for Bitcoin may come tonight. At 11PM CET, MSCI may officially DELETE Strategy, $MSTR. The world’s biggest corporate Bitcoin holder could lose its spot on…
Original source excerpt
The most BEARISH signal for Bitcoin may come tonight. At 11PM CET, MSCI may officially DELETE Strategy, $MSTR. The world’s biggest corporate Bitcoin holder could lose its spot on the world’s top sto…
The most BEARISH signal for Bitcoin may come tonight. At 11PM CET, MSCI may officially DELETE Strategy, $MSTR. The world’s biggest corporate Bitcoin holder could lose its spot on the world’s top stock lists. TRILLIONS of dollars from BIG investment funds automatically follow these lists. If a stock is on the list, these funds must BUY it. If it gets kicked off, they must SELL it. MSCI’s new rules kick out companies that fail 4 of 5 tests showing they run a real business. Strategy reportedly fails all 5. Even Strategy itself expects to be removed. If it happens, these funds will have to sell ~13 million $MSTR shares by Nov 30. At Monday’s close of $121.07, that’s ~$1.6B in forced selling. That’s ~60% of what the stock normally trades in a full day. JPMorgan says the selling could reach -$2.8B, plus another -$8.8B if other big stock lists follow. The stock has already fallen from $145.16 to $121.07 in just two weeks, a drop of ~17%. This matters for Bitcoin because Strategy buys BTC by selling its own stock to investors. A lower $MSTR price means less money for every share it sells. And it gets WORSE. Investors have always paid extra for $MSTR, valuing it above the Bitcoin it holds. That "extra" is what lets Strategy sell new shares and turn the cash into more BTC. In mid-October, it was down to just ~8%. Once $MSTR is worth the same as its Bitcoin, selling new shares to buy more BTC stops making sense. And if Strategy still needs cash to pay its bills, the next thing it can sell is its Bitcoin. That’s 850,364 BTC, worth billions, sitting on the table. From “never sell” to “need to sell.” What a ride.
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