Bitcoin dips just 1% despite risk of up to $2.8 billion in forced Strategy selling

Strategy’s potential removal from MSCI indexes could trigger up to $2.8 billion in stock sales, but the more consequential risks for Bitcoin may be reduced purchasing capacity at the company and the precedent set for other index providers.

In a video released on October 19, Bitcoin analyst Joe Consorti said the potential MSCI removal could lead to as much as $2.8 billion in Strategy share sales while having limited direct impact on the Bitcoin market. A falling share price, however, could weaken the company’s ability to fund further Bitcoin purchases.

MSCI introduced a category for non-operating companies whose primary activity is holding assets rather than running an operating business. Consorti said Strategy could be excluded under the rules, with the final list due on November 11 and the change scheduled to take effect at the November 30 close.

Funds tracking MSCI indexes hold an estimated 3.1% of Strategy’s shares, or roughly 13 million shares. Forced-sale estimates range from $1.9 billion to JPMorgan’s $2.8 billion, compared with Strategy’s average daily trading value of about $2.9 billion this year.

The concentration of those sales at the closing bell presents a greater concern than their overall size. Index funds must align their holdings when the removal takes effect, allowing other traders to sell in advance. Consorti said historical removals from the S&P 500, Russell and Nasdaq show that most price damage occurs between the announcement and the deadline.

Strategy shares fell 9.5% on Friday to close at $136.72, while Bitcoin declined about 1%. The share sales would not require Strategy to sell any Bitcoin, leaving its roughly 850,000 BTC, valued at about $69 billion, on its balance sheet.

An indirect risk comes from Strategy’s Bitcoin acquisition model. The company raises money by issuing common stock and a dividend-paying security called STRC, then uses the proceeds to buy Bitcoin. That approach works most effectively when its market-value-to-net-asset-value ratio, or mNAV, is above 1. With the ratio near 1, additional pressure on the stock could temporarily reduce the company’s Bitcoin purchases.

Consorti also pointed to broader access to Bitcoin across Wall Street. Charles Schwab has 40.3 million active brokerage accounts and $13.33 trillion in client assets, while Vanguard has more than 50 million brokerage customers and over $11 trillion. Together, their clients have access to Bitcoin through platforms holding roughly $24 trillion in assets.

A 1% Bitcoin allocation from Schwab client assets would amount to $133 billion, about 47 times the maximum estimated forced sale of Strategy shares. Bank of America’s Merrill now allows advisers to recommend Bitcoin allocations of 1% to 4% of client portfolios, including retirement accounts, with no minimum net worth.

US spot Bitcoin ETFs hold about 1.28 million BTC worth more than $105 billion after roughly $57 billion in net inflows since launch. The funds have nevertheless recorded about $760 million in net outflows since October 7, indicating that expanded access has not yet translated into uninterrupted inflows.

The MSCI decision therefore poses a more immediate risk to Strategy’s financing capacity than to Bitcoin supply. Consorti said the index-driven sale could pressure the stock and briefly slow purchases by the largest corporate Bitcoin holder, but it would force no Bitcoin onto the market as major financial firms continue building investment and custody access.