Strategy Loses MSCI Index Spot as Bitcoin Bet Faces New Test

MSCI confirmed Strategy’s removal from its USA Index, setting up portfolio changes for funds tracking the benchmark. The decision followed a dispute over how the index provider classifies companies whose businesses center on holding assets.

Funds Face Strategy’s November Index Exit

Index provider MSCI named Strategy Inc. (Nasdaq: MSTR) for removal from its USA Index on Nov. 11. The benchmark tracks large and midsize U.S. companies. Its index review results identified “STRATEGY A,” the company’s publicly traded Class A common stock, which trades under the ticker MSTR.

Across the USA Index, the changes included 24 deletions, including Carlyle Group and Iren, with Moderna the sole addition. MSCI stated:

“Changes will be effective as of the close of business on November 30, 2026.”

The review used an Oct. 20 price cutoff and remained subject to adjustments for corporate events and other relevant developments before implementation.

Funds tracking the benchmark could sell Strategy shares as they adjust portfolios to reflect its removal. JPMorgan’s November 2025 estimate put potential MSCI-related selling at about $2.8 billion. The bank calculated that figure against an earlier digital asset exclusion proposal.

Eligibility Tests Replace Crypto-Specific Restrictions

The exclusion followed MSCI’s Oct. 15 decision to expand its non-operating company exclusions. That category covers investment funds and corporate issuers with similar financial characteristics.

Under the adopted eligibility framework, companies first undergo an assessment of whether they have substantial operating assets. Those failing face five financial tests covering assets, business expenses, cash flow, investment value changes, and reliance on outside funding. Four or more flags make a security ineligible, subject to buffers for existing constituents.

Existing members face removal only after failing the exclusion screen in each of their two most recent annual financial reports; MSCI may also consider interim reports covering shorter periods. With the November review, MSCI will end restrictions affecting firms whose digital assets represented at least half their total assets. Those freezes limited increases in shares counted for index calculations and proportions treated as available to foreign or domestic investors.

Strategy Challenged MSCI’s Operating-Business Test

During consultation, Strategy’s challenge to MSCI’s classification alleged that the approach targeted digital asset treasury companies. It argued that the methodology repackaged a withdrawn 2025 proposal aimed at firms with digital assets worth at least half their total assets. The company urged MSCI to withdraw the test.

Its defense centered on a bitcoin treasury business it reported as an operating segment under U.S. accounting standards. Strategy maintained that MSCI’s operating and non-operating terminology lacked a basis in recognized accounting frameworks. It also argued that the methodology inserted policy judgments into index construction.

In its public consultation response, the company said exclusion would not meaningfully affect its business. MSCI-linked funds then held approximately 13 million shares, equivalent to 3.1% of Strategy’s basic shares outstanding. The company put that holding at 60% of its 30-day average daily trading volume, less than one day’s turnover.