Summary
- Bitwise's Chief Investment Officer said MicroStrategy has at least a 75% probability of being removed from the MSCI index.
- JPMorgan estimated that index funds would sell MicroStrategy shares worth 2.8 billion dollars if excluded from the index.
- However, the exclusion would not have a large impact on MicroStrategy's stock price, and the possibility of selling bitcoin is low.
An analysis said that MicroStrategy, the world's largest bitcoin (BTC) holding company, would not see large stock price volatility even if it were removed from the Morgan Stanley Capital International (MSCI) index.
Matt Hogan, Bitwise Chief Investment Officer (CIO), said in his 'Weekly CIO Memo' on the 3rd (local time), "Considering that MSCI is currently inclined to remove digital asset treasury (DAT) companies, the probability that MicroStrategy will be excluded from the (MSCI) index is at least 75%." Hogan said, "MSCI believes many DAT companies only buy and hold cryptocurrency assets and therefore are not eligible to be included in the index," and "JPMorgan estimated that index funds would sell MicroStrategy shares worth 2.8 billion dollars if excluded from the benchmark index."
However, Hogan said the MSCI index exclusion would not have a large impact on MicroStrategy's stock price. Hogan said, "(Index exclusion) will not have a large effect on MicroStrategy's stock price," adding, "2.8 billion dollars is a significant amount of selling, but its impact is smaller than expected and is largely already priced into the stock." He added, "The reason MicroStrategy's stock has been in decline since October 10 is that the market has already priced in the (index) exclusion," and "In the long term, MicroStrategy's value depends on how well it executes its (bitcoin) strategy, not on index funds tracking MicroStrategy."
He also mentioned the possibility of MicroStrategy selling bitcoin. Hogan said, "There is no reason to sell (bitcoin) even if MicroStrategy's stock falls below net asset value (NAV)," and "Michael Saylor, MicroStrategy's chairman, directly holds 42% of the voting shares, and it would be hard to find someone more confident than Chairman Saylor in bitcoin's long-term value." He added, "Currently, the bitcoin price is 24% higher than MicroStrategy's average purchase price," and "There is no short-term factor that would force MicroStrategy to sell bitcoin."
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul![[Market] Bitcoin falls below $82,000...$320 million liquidated over the past hour](https://media.bloomingbit.io/PROD/news/93660260-0bc7-402a-bf2a-b4a42b9388aa.webp?w=250)
