The threat of a large-scale forced sale of crypto-related stocks has been averted.
However, this reprieve comes with a structural problem that fundamentally changes the economics of “Bitcoin Treasuries” trading.
On January 6, MSCI, a leading benchmark provider for global equity and ETF markets, announced that it will retain Digital Asset Treasury Company (DATCO) in its global index for review in February 2026, and will exclude companies like Strategy (formerly MicroStrategy).
It stated:
“For the time being, the current index treatment of DATCOs identified on the MSCI-published Tentative List of Companies with Digital Asset Holdings of 50% or More of Total Assets will remain unchanged.”
Following the news, Strategy’s Executive Chairman Michael Saylor highlighted the victory of staying in the benchmark.
However, the index provider simultaneously introduced a technical freeze on the number of shares of these companies. It was explained as follows.
“MSCI will not implement increases in the number of shares (NOS), foreign inclusion factor (FIF), or domestic inclusion factor (DIF) for these securities. MSCI will defer additions or size segment transitions for all securities included in the reserve list.”
With this decision, MSCI effectively severed the link between new stock issuance and automatic passive purchases.
This move means that the “upside” mechanics of index trading have been dismantled, just by removing the “downside” of forced liquidations.
End of machine bidding
The immediate market reaction, with Strategy shares surging more than 6%, reflected relief that a liquidity catastrophe had been avoided.
Notably, JPMorgan suggested that a complete exclusion could have triggered a negative sale of MSTR of $3 billion to $9 billion.
This volume would likely have caused the stock price to collapse and force the company to liquidate its Bitcoin holdings.
But the removal of the threat of exclusion masks the new reality: the automatic demand lever for stocks is gone.
Historically, when Strategy issued new shares to fund its Bitcoin acquisition, the index provider would eventually update its share count.
As a result, passive funds that track the index are mathematically forced to buy a proportionate portion of new issues to minimize tracking error. This created a reliable source of demand that was independent of price, allowing us to absorb dilution.
The new “freeze” policy breaks this loop. Even if the strategy significantly increases its float to raise capital, MSCI will effectively ignore these new stocks for index calculation purposes.
The company’s weight in the index will not increase, so ETFs and index funds will not be forced to buy new paper.
Market analysts say this change will force a return to fundamentals. Without the backstop of demand to track a benchmark, Strategy and its peers are now forced to rely on active managers, hedge funds and retail investors to absorb new supply.
Quantifying the liquidity gap
To understand the magnitude of this change, market researchers model the “bid decline” that issuers will have to deal with going forward.
Cryptocurrency research firm Bull Theory quantified this liquidity gap in a note to clients. The company envisioned a hypothetical scenario involving a financial company with 200 million shares outstanding. About 10% of its outstanding shares are typically held by passive index trackers.
In the bull theory model, if the company issues 20 million new shares to raise capital, the old index structure would eventually obligate the passive fund to purchase 2 million of those shares.
If the theoretical price is $300 per share, this automatically equates to $600 million in price-independent buying pressure.
Under MSCI’s new freeze, Bull Theory pointed out that the $600 million bid would drop to zero.
With this in mind, it states:
“The strategy now is to find a private buyer, offer a discount, or raise less money.”
This means that forced demand from index funds has been removed.
Therefore, this is a major hurdle for Strategy, which issued more than $15 billion in new shares throughout 2025 to aggressively accumulate Bitcoin.
If the company wants to replicate an issuance of that size in 2026, it will likely do so in a market without passive support. Without such a structured bid, the risk of price correction during a dilution event increases significantly.
ETFs emerge as quiet winners
MSCI’s decision to cap these companies, rather than banish them or leave them alone, also significantly changed the competitive dynamics of the asset management sector.
Over the past year, U.S. spot Bitcoin ETFs have matured as an asset class and attracted significant interest from institutional investors. In fact, this rally prompted MSCI’s former parent company Morgan Stanley to file for its own spot Bitcoin ETF.
From this advantage, Strategy competes with these fee-incurring Bitcoin ETFs and offers investors a way to gain passive Bitcoin exposure through a corporate structure. The new rules reduce DATCO’s ability to scale efficiently through the stock market by freezing its index weighting.
If Strategy’s ability to raise cheap capital declines, large capital allocators may rotate capital away from corporate stocks and into spot ETFs that do not involve corporate operational risk or premium-to-NAV fluctuations.
This flow of funds will directly benefit issuers of spot ETFs, including large Wall Street banks, effectively recouping fees that were previously reflected in the equity premium.
By neutralizing the “flywheel” effect of financial strategies, index providers may have unintentionally or intentionally leveled the playing field in favor of traditional wealth management products.
