The next index eligibility review for the Strategy will occur on November 11, when MSCI will announce its constituent adjustments, which could result in the company being removed from its global equity benchmark index.
The company has objected to the relevant eligibility rules and stated that the impact, even if delisted, would be limited. The company estimates that the related index funds collectively hold approximately 13 million shares of MSTR, representing 3.1% of its basic outstanding shares.
The impact of this decision extends beyond whether these funds continue to hold the stock. Strategy frequently finances Bitcoin purchases by selling new shares, and its October filings show that this linkage continues even as the company uses cash to repurchase preferred shares.
Between October 12 and October 18, the company raised approximately $22 million through the sale of common shares and spent $22.1 million to purchase Bitcoin. In the following week, the company reported no at-the-market share offerings or Bitcoin purchases.
Being removed from the stock index does not mean Strategy must sell its Bitcoin. However, it may cause buyers tied to the benchmark index to exit, and since the company relies on this stock to raise new capital, this adds another factor to consider in future issuance decisions.
MSCI has adopted this methodology and named Strategy on its potential impact list. The final constituent announcement will be released on November 11, and the changes will take effect after the close of trading on November 30.
The strategy classifies its Bitcoin business as an operating business.
Strategy has urged MSCI to withdraw the framework, arguing that the index provider has merely rephrased and repackaged its previous proposal targeting digital asset treasury companies. The earlier approach focused on companies where digital assets account for at least 50% of total assets.
In its public response, Strategy stated that the revised terms merely apply a different set of rules to the same category of businesses. The company noted that the distinction between operating and non-operating activities has no basis in U.S. Generally Accepted Accounting Principles, International Financial Reporting Standards, or any recognized legal framework.
The company stated that it classifies its Bitcoin business as an operating segment under U.S. GAAP, consistent with its communications with SEC staff. The company believes that MSCI is introducing its own policy judgments into index construction.
The opposition to the strategy extends beyond its potential removal. The company stated that this framework undermines the neutrality and reliability that investors expect from broad stock index providers.
MSCI stated that additional corporate issuers with characteristics similar to investment vehicles should be evaluated for potential inclusion. Investment funds, business development companies, and other passive investment vehicles have already been excluded from its equity investment scope.
The new approach evaluates companies based on their assets and financial characteristics, rather than removing them solely for holding Bitcoin.
As previously reported by crypto.news, the adopted index eligibility criteria originated from a public consultation that began on August 3. The feedback period ended on September 30, and MSCI announced its decision prior to its set deadline of October 16.
As part of its campaign opposing the proposal, Strategy also urged supporters to contact MSCI. Its response page still outlines the company’s reasons for opposition and its estimates of holdings in index-linked funds.
MSCI has not yet announced; Strategy's accounting division has determined that it is exempt from the new screening criteria. The company's eligibility will be determined using the methods applied in the index review.
MSCI requires companies to pass operational and financial tests.
According to the final methodology as of October, a company passes the initial screening if its operating assets account for at least 50% of total assets. Companies below this threshold must undergo five additional financial tests.
These tests cover operating asset intensity, expense intensity, operating cash flow, fair value intensity, and dependence on external financing. An issuer will meet the exclusion criteria only if it fails at least four of these tests.
The eligibility criteria for existing component stocks differ from those for companies applying for inclusion. For example, regarding operational asset intensity, the requirement for existing component stocks is at least 10%, while for non-component stocks, it is at least 20%.
Both types of companies face a minimum fee intensity threshold of 5% and a requirement for positive operating cash flow. Fair value assessments also include alternative criteria based on assets and sales-related metrics.
For existing components, the fair value threshold related to sales is 75%, and for non-components, it is 50%. The thresholds for financing as a percentage of assets are 30% and 20%, respectively, with an alternative condition concerning whether capital raised funds asset accumulation.
MSCI requires that existing constituents must fail the relevant screening in both of the last two reporting periods to be removed. Potential new constituents, however, may lose eligibility if they fail the screening in any one period.
The first four financial tests are evaluated separately for each period. Capital dependency is assessed cumulatively across periods, and MSCI may also consider the latest interim information where appropriate.
This method stipulates that reviews will be synchronized with the index reviews in February, May, August, and November. For the November review, financial filings released as of the last business day of September are typically considered.
This deadline precedes Strategy’s earnings release on October 29. MSCI’s methodology allows for the inclusion of mid-period information, but the institution has not yet published company-level guidance on which final inputs it will use for Strategy in its November review.
These rules will replace the temporary restrictions imposed in October 2025 on companies whose digital assets account for at least 50% of total assets. Those restrictions had limited increases in the number of index constituents and inclusion factors, and delayed certain new inclusions and size category adjustments.
The list of potential impacts includes five companies, including Strategy.
The potential impact list from MSCI includes five securities that may be removed, including Strategy, Metaplanet, Yellow Cake, Skel Fjarfestingafelag from Iceland, and Upexi.
This document uses financial information as of September 30 and market capitalization data as of October 9, and labels these actions as potential changes in the November review.
In this snapshot, Strategy is listed as a large-cap component, with an issuer market capitalization of approximately $43.32 billion and a free-float adjusted market capitalization of approximately $40.29 billion. Metaplanet is listed as a small-cap component, with a free-float adjusted market capitalization of approximately $803.9 million.
The free-float adjusted market capitalization of Yellow Cake is approximately $1.8 billion. The corresponding values for the two other potential delisted companies, Skel and Upexi, are approximately $102.9 million and $45.3 million, respectively.
The combined free-float adjusted market capitalization of these five companies is approximately $43.05 billion, with Strategy accounting for about 93.6%. This calculation is based on MSCI's point-in-time data and does not estimate the number of shares held by index funds.
The document also adds 17 securities to the potential watchlist. SharpLink appears alongside companies such as Urbana, Stack Capital Group, Sui Group Holdings, Ton Strategy, and DeFi Development Corp.
The latest list is broader than the earlier simulation released during the comment period. That simulation, based on May data, had identified Strategy, Metaplanet, and Yellow Cake as potential candidates for removal and listed three companies for observation.
Earlier deletion proposals described a dual-period requirement for existing constituents. Companies that meet the selection criteria only in the most recent period may first be placed on a watchlist and then reviewed in subsequent evaluations.
MSCI has set the final list release date for November 11. The potential impact document does not replace this announcement, and the market capitalizations listed as of October 9 are not the current real-time prices of these companies.
The strategy indicates that the index-linked position is approximately 13 million shares.
The strategy believes that its removal will not have a material impact on its business, as the positions linked to the relevant index are relatively small compared to its equity base and trading volume. The company stated in its response that this position amounts to approximately 13 million shares of MSTR.
The company stated that this represents 3.1% of its basic outstanding shares and approximately 60% of its 30-day average daily volume. The company also compared this position to the trading volume of companies removed during the May 2026 MSCI World rebalance over approximately two trading days.
These figures form part of Strategy's opposition to the rule. MSCI's public announcement did not separately estimate how many Strategy shares the fund would sell.
Index funds operate under authorization tied to their benchmark, and the timing and method of portfolio adjustments depend on the specific product. Some funds hold all constituent stocks, while others use representative sampling or other tools to track the index.
The prospectus summary for the iShares MSCI ACWI ETF describes a representative sampling approach. The fund seeks to track its benchmark by constructing a portfolio whose overall investment characteristics are similar to those of the benchmark.
The U.S. Securities and Exchange Commission's guidance for investors notes that index funds may employ either full replication or sampling strategies. The guidance lists trading costs and tracking error as factors that may cause a fund's returns to differ from its benchmark.
The strategy's estimate of 13 million shares reflects the position size attributed by the company to the related tracking products. This is not a public commitment that all these funds will execute an equal number of sell orders at the same price in a single transaction.
The final constituent announcement will be nearly three weeks prior to the effective date. MSCI has confirmed that the close of trading on November 30 will be the effective date for these review changes.
The strategy has not yet disclosed estimates of the future stock price under either scenario. The company argues that the disclosed position is sufficiently small relative to trading volume, so the business should be able to withstand its removal.
Recent Bitcoin purchases have relied on new common stock issuance.
Recent filings show that, while investing larger amounts to repurchase its STRC preferred shares, the company has also continued to purchase Bitcoin. Between October 5 and October 11, the company acquired 250 BTC for approximately $21.5 million and spent $192.4 million to repurchase STRC shares.
The company stated that $21 million of this Bitcoin purchase was funded by the net proceeds from the sale of MSTR shares, with an additional $500,000 coming from existing U.S. dollar cash.
These Bitcoin and STRC transactions increased the company’s Bitcoin holdings to 848,250 BTC. As of that time, the company’s total accumulated purchase cost was approximately $64 billion, including fees and expenses.
Over the following week, Strategy purchased an additional 267 BTC for $22.1 million, increasing its holdings to 848,517 BTC. According to its filing on October 19, the company sold 140,872 common shares, generating approximately $22 million in net proceeds.
During this period, the company also used $193.1 million in cash to repurchase STRC and reported paying $45.5 million in preferred stock dividends from designated reserves.
Between October 19 and October 25, Strategy did not buy or sell Bitcoin, nor did it sell shares through its market price issuance program. Instead, the company used $204.9 million in cash to repurchase 2,068,459 shares of STRC.
The disclosure on October 26 showed that its Bitcoin holdings remained unchanged at 848,517 BTC, with a reported purchase cost of $64.02 billion. The company also stated that there were no repurchases of MSTR or other listed series of preferred shares during the week.
As the buyback continues, the independent cash category of the Strategy has also changed. Its USD cash balance has decreased from $447.3 million a week ago to $242.4 million, while the designated USD reserves stand at $4.83 billion.
The company stated that these reserves are used to support preferred stock dividends and debt interest. U.S. dollar cash can be used to purchase Bitcoin, capitalize deposits, and other capital management activities.
Chief Executive Officer Phong Le previously stated that Strategy intends to purchase STRC when it trades below its $100 par value, with the exact timing of purchases dependent on market price and liquidity. Management stated that discount repurchases are a way to reduce future preferred dividend obligations.
The company already has a established policy for selling Bitcoin.
In June, the Strategy Board approved a Bitcoin monetization plan as part of a broader capital framework. This policy permits the company to sell Bitcoin for specific purposes including reserves, dividends, interest payments, and buybacks.
This capital framework authorizes raising up to $1.25 billion through the sale of Bitcoin to supplement U.S. dollar reserves. It also permits additional monetization under established conditions for preferred stock dividends, debt interest payments, and authorized share repurchases.
The company stated that any sale beyond these purposes or authorized limits requires further approval from the board. The plan has no fixed expiration date and does not require Strategy to sell any Bitcoin.
The same June announcement also established a policy that dollar reserves must cover at least the expected preferred dividends and debt interest for the next 12 months. If reserves fall below this level, board authorization is required.
The Strategy states that reserves may only be used for preferred stock dividends and debt interest without additional board approval. Repurchases of common or preferred stock are funded from other sources, including the approved Bitcoin monetization plan.
The company's October performance report stated that approximately $431.8 million in Bitcoin has been sold year-to-date in 2026 to fund dividends on certain preferred shares and STRC repurchases. Its weekly filings, however, document periods of buying Bitcoin, selling Bitcoin, or neither.
Index removal first affects investors' holdings, not the company's cash.
MSCI determines which companies qualify for inclusion in its benchmark indices, while investment managers decide how to track these indices based on their fund mandates. If a company is removed, it means the company will be excluded from the reference portfolio that these products aim to track.
If funds hold MSTR to replicate the affected index, they must adjust their portfolios according to the revised benchmark. Managers using representative sampling may determine their holdings within the scope of their investment policies, so the published list of components does not mean that every tracking product must execute identical trades.
The 13 million share estimate disclosed by Strategy reflects the company's view on the size of the relevant position. It does not specify the scheduled execution date for each manager or identify who will be on the other side of the trade.
The company believes this amount is manageable, as it is below the volume of an average trading day. This comparison reflects overall market turnover—where every completed sale has a buyer—but does not indicate at what price additional large sell orders would be absorbed by the market.
The MSCI potential impact table assigns Strategy a free-float adjusted market capitalization of approximately $40.29 billion. This figure measures the equity value of the company that could be included in the index at a specific point in time, not the amount in dollars that tracking funds must sell.
The index provider has not yet released a price forecast for MSTR shares following the November decision. The Strategy's opposition page states that removal will not have a material impact on the company, while its own documents continue to indicate that new issuances remain contingent on market conditions.
When investors sell their existing shares, they receive the proceeds from the sale. The Strategy only receives cash when new shares are issued, as it did during its October Coin Purchase Week.
This distinction means that financing issues occur after portfolio adjustments. Changes in demand or shifts in the value of stock trades may alter the terms available to the company when it issues securities in the future, but the index sell-off itself does not withdraw cash from the Strategy’s bank account.
Maintaining eligibility as a component stock only means that Strategy remains qualified for this review. It does not imply any commitment of funds to purchase a fixed number of new shares directly from the company, nor does it guarantee that management will continue issuing shares at the previous rate.
The November announcement will address the component stock issue before implementation on November 30. Afterward, the company’s disclosures will indicate whether Strategy continued to raise funds and purchase Bitcoin during this period.
Funding issues affect your next purchase.
The strategy established its Bitcoin position through large-scale capital raising, far exceeding the revenue generated by its software business. Investors purchased securities issued by the company, which then allocated the proceeds in accordance with its treasury and capital management policies.
The company’s October 29 performance report showed that, year-to-date, it has raised $21.23 billion in capital and purchased $14.33 billion in Bitcoin. The announcement also revealed third-quarter revenue of $125.4 million.
The company reported net proceeds of $5.41 billion from its at-the-market offering program this quarter, with an additional $58.7 million raised between October 1 and October 23.
The quarterly data and October data cover different periods, but the weekly disclosure documents specify the sources of funds used for purchases. These documents show that proceeds from common stock issuances nearly covered the purchase of 250 BTC disclosed on October 12 and the purchase of 267 BTC disclosed on October 19.
The purchase of 267 BTC occurred after the sale of 140,872 shares of MSTR. This transaction increased the company’s reported holdings to 848,517 BTC.
The next disclosure shows that the Bitcoin balance remained unchanged. Strategy's statement on October 26 stated that no Bitcoin was issued at market price or bought or sold between October 19 and October 25.
The company continued repurchasing STRC that week, disclosing that the $204.9 million purchase was funded with U.S. dollar cash, reducing its cash balance to $242.4 million while maintaining designated reserves.
These transactions show that management is making choices among different uses of available capital. The company can purchase Bitcoin, support reserve coverage, or repurchase securities under authorization, with each activity separately disclosed.
According to company policy, these reserves have been designated for preferred stock dividends and debt interest. Treating the entire balance as immediately available for additional Bitcoin purchases would disregard these restrictions.
The company’s capital framework makes future issuances contingent on market conditions and management’s judgment regarding shareholder value. Strategy states that the company remains disciplined when MSTR trades close to its net Bitcoin per share metric.
If the stock price is lower, the company would need to issue more shares to raise the same total amount before deducting costs. Whether Strategy will accept these terms, switch to other available funding sources, or delay the purchase remains a decision for management.
MSCI’s announcement will not determine the price of Bitcoin, investor demand for all Strategy securities, or the company’s full range of financing options. It will determine only whether the affected stock benchmark indices continue to include MSTR.
Selling Bitcoin remains a decision authorized separately by the board.
The index fund has no right to redeem its held MSTR shares for a portion of the company’s Bitcoin reserves. The fund’s securities disclosure documents state that shareholders have no ownership rights or redemption rights to the company’s Bitcoin.
Therefore, the company's bitcoin sales year-to-date cannot be described as index redemptions; they are corporate disposals made under the company’s own capital management plan.
Strategy has not announced any disposals triggered by the November review. Its latest weekly filing shows no Bitcoin sales occurred between October 19 and October 25.
Regardless of the index outcome, the company continues to bear financing obligations, including preferred stock dividends and debt interest. Pursuant to policies adopted by management, it designates reserves to fund these payments.
Future filings will show whether management uses newly issued shares, existing cash, or approved Bitcoin sales to meet these obligations. The index announcement alone does not indicate which source the company will choose.
MSCI’s final list will be published on November 11. If removed during the November review, the change will take effect after market close on November 30; at that time, Strategy’s subsequent disclosures of stock sales and Bitcoin transactions will show how funding was generated for treasury operations during the implementation period.
Things to pay attention to
- November 11 decision: MSCI will announce the final results of its November constituent adjustments.
- Effective November 30: Any changes made under adopted rules will take effect after market close.
- Fund Holdings: The updated portfolio will show how the related tracking products adjust their MSTR holdings.
- Corporate trading: Strategy’s weekly documentation records actual Bitcoin purchases, sales, issuances, and repurchases.
- Financing: The proceeds from common stock issuances and the stated sources of funds for each Bitcoin purchase will indicate whether the company continued to raise financing during the review period.
Frequently Asked Questions
Has MSCI removed Strategy?
MSCI has adopted the eligibility criteria and listed Strategy on the potential impact list. The final constituent decisions will be announced on November 11.
If removed, when will it take effect?
MSCI has designated the close of November 30 as the implementation date. The announcement of constituent changes and the effective date are two separate steps in the review schedule.
What does the strategy oppose?
The company states that its Bitcoin business is classified as an operating segment and believes that MSCI’s framework unfairly targets digital asset treasury companies. The company estimates that the related tracking products hold approximately 13 million shares of MSTR.
How does MSCI evaluate eligibility?
Companies with operating assets below the 50% core threshold must undergo five financial tests. At least four must be flagged, and existing component stocks must fail the criteria during both evaluation years.
Which companies appear on the potential deletion list?
The list includes Strategy, Metaplanet, Yellow Cake, Skel Fjarfestingafelag, and Upexi. The financial information used is as of September 30, and the market capitalization is as of October 9.
Will selling an index fund automatically trigger the Strategy to sell Bitcoin?
No. The fund transactions involve MSTR shares, while the company reports holding 848,517 BTC in its treasury. The Strategy also has a separate Bitcoin monetization policy authorized by the board.
Has Bitcoin been sold this year under this strategy?
Yes. Its October 29 performance report showed that approximately $431.8 million in Bitcoin has been sold year-to-date to support preferred stock dividends and STRC repurchases. The company also reported no Bitcoin purchases or sales between October 19 and October 25.
What can show whether this decision affects Bitcoin purchases?
The strategy document will disclose the sale of new shares, cash usage, and Bitcoin purchases. These transactions will show whether the company continues to finance Bitcoin acquisitions and how it does so following review. This article is for educational analysis only and does not constitute investment advice.