Strategy (MSTR) Faces Sharp Market Pressure Over Heavy Bitcoin Holdings

Strategy MSTR shares slid about 3% on Friday morning, reflecting investor concerns over potential exclusion from major MSCI (MSCI) equity indices.

JPMorgan analysts warned that if MSCI proceeds, billions of dollars could flow out of ETFs and mutual funds tied to the benchmarks.

The index provider is consulting on whether companies holding 50% or more of their assets in digital currencies should remain in its global investable market indexes. Strategy, heavily invested in bitcoin (BTC-USD), could see between $2.8 billion and $8.8 billion in outflows if MSCI and other index providers follow through.

Currently, Strategy is part of the Nasdaq 100, MSCI USA, and MSCI World indexes. Analysts note that while active fund managers are not required to adjust their holdings, exclusion from key indices could create negative sentiment, making it harder for the company to raise capital through equity or debt.