Strategy, formerly MicroStrategy, has avoided expulsion from MSCI Inc.'s global indices, averting a potential massive sell-off of crypto-linked equities. While this spares firms like Strategy, the index provider has implemented a technical freeze on share counts for Digital Asset Treasury Companies (DATCOs). This decision severs the link between new equity issuance and automatic passive buying. The move removes the downside of forced liquidation but dismantles the upside mechanics of the index trade. The immediate market reaction saw a surge in Strategy’s stock, reflecting relief that a catastrophic liquidity event was off the table. However, the removed threat of exclusion masks a new reality where the automatic demand lever for the stocks is gone.

Strategy, formerly MicroStrategy, has avoided expulsion from MSCI Inc.'s global indices, averting a potential massive sell-off of crypto-linked equities. While this spares firms like Strategy, the index provider has implemented a technical freeze on share counts for Digital Asset Treasury Companies (DATCOs). This decision severs the link between new equity issuance and automatic passive buying. The move removes the downside of forced liquidation but dismantles the upside mechanics of the index trade. The immediate market reaction saw a surge in Strategy’s stock, reflecting relief that a catastrophic liquidity event was off the table. However, the removed threat of exclusion masks a new reality where the automatic demand lever for the stocks is gone.