Strategy Faces MSCI Exclusion as We Pause the Podcast | Ahead of the Curve
Strategy Faces MSCI Exclusion as We Pause the Podcast | Ahead of the Curve
October 16, 2026
Welcome to Ahead of the Curve, from K33 Research. Today is Friday, October 16, 2026.
One of the biggest Bitcoin treasury companies in the world could soon find itself excluded from major equity indexes. On Thursday, index provider MSCI confirmed a new methodology that could remove Strategy, Metaplanet, and several other companies from its global indexes. For Strategy, the potential consequences are significant. Funds tracking these indexes could be forced to sell billions of dollars worth of shares, putting pressure on the stock and potentially making it more difficult for the company to raise fresh capital. This is the latest development in a debate that started last October, when MSCI first proposed excluding companies whose digital assets represented at least 50% of their total assets. That proposal was withdrawn in January following industry opposition. The new approach is broader. Rather than targeting Bitcoin treasury companies specifically, MSCI will assess whether a company is primarily an operating business or effectively a vehicle for holding financial assets. The methodology considers operating assets, expenses, cash flow, changes in asset valuations, and reliance on external financing. Companies with insufficient operating assets that also fail at least four of the five additional tests could become ineligible.
The practical implications are still uncertain. MSCI has not yet confirmed which companies will actually be removed. The final list is expected on November 11, with exclusions taking effect after the market closes on November 30. Strategy has strongly opposed the methodology, arguing that its Bitcoin treasury operations constitute a genuine operating business. The potential selling pressure has attracted considerable attention. JPMorgan previously estimated that exclusion could generate approximately $2.8 billion in selling of Strategy shares by index-tracking funds, although that estimate was based on the earlier proposal. Strategy, meanwhile, estimates that these funds hold around 13 million shares, representing just over 3% of its outstanding stock. According to the company, that amounts to less than one day's trading volume. The actual market impact remains difficult to predict, particularly if other index providers follow MSCI's approach. What matters is the distinction between pressure on Strategy's share price and pressure on Bitcoin itself. An index exclusion would not require Strategy to sell its Bitcoin. But reduced passive demand for its shares could affect its ability to finance additional purchases. For a company whose strategy relies heavily on access to capital markets, that is a development worth following.
Another major story this week comes from the United Kingdom, where a court ruling could determine the fate of one of the world's largest government-held Bitcoin reserves. On October 12, the High Court ruled that Chinese law, rather than English law, should determine whether victims of a massive Chinese Ponzi scheme have ownership rights to more than 61,000 Bitcoin seized by British police in 2018. The Bitcoin, now worth approximately $5 billion, was acquired using proceeds from fraud committed between 2014 and 2017. The central question is whether victims can establish ownership rights to the Bitcoin itself, rather than simply a claim for repayment of their losses. The ruling does not settle who ultimately owns the coins. But according to the Financial Times, applying Chinese law could make it harder for victims to establish the necessary ownership rights, potentially allowing the British government to retain a substantial portion of the holdings. Chinese media reports suggest that the roughly 16,000 victims could be limited to recovering their original investments plus interest, without participating in Bitcoin's subsequent appreciation. The claimants are appealing, so the outcome remains unresolved. It is an unusual case, both because of the sheer amount of Bitcoin involved and because the question of who ultimately benefits from its appreciation remains open.
Turning to institutional adoption, BNY and Citadel Securities have completed the first triparty repurchase agreement using a tokenized United States Treasury on a major triparty platform. A repo is essentially a short-term financing transaction in which securities are used as collateral for borrowing cash. In this case, Citadel purchased a two-year United States Treasury note through BNY on Tradeweb. BNY then recorded a tokenized version of the security on its private ledger, allowing settlement within minutes rather than the usual next-business-day process. Citadel subsequently used that tokenized security as collateral to borrow cash overnight from BNY. The transaction illustrates a practical application of tokenization within existing financial infrastructure. Rather than creating an entirely new financial product, the technology was used to improve the settlement and movement of collateral in a familiar market. This was a specific transaction, not evidence that the wider Treasury market has adopted tokenized settlement. Still, it represents a concrete step forward. BNY has already launched a tokenized deposit service earlier this year and plans to expand its digital cash capabilities and settlement hours, including coverage of European and Asian trading hours, next year.
Meanwhile, regulatory progress in Washington remains uncertain. Patrick Witt, who led the White House's digital asset advisory efforts, has left his position after his temporary assignment from the Department of Defense expired. Witt had been closely involved in efforts to advance the Clarity Act, the proposed legislation intended to establish a clearer regulatory framework for the United States crypto market. The bill passed the House of Representatives more than a year ago but has since stalled in the Senate. Disagreements over stablecoin rewards and ethics provisions relating to President Trump's crypto interests remain significant obstacles. An initial procedural vote failed last month, and Witt's departure leaves the initiative without one of its central advocates inside the White House. No replacement had been named as of the report's publication. This does not mean the legislation is dead, but it adds to the uncertainty surrounding its path forward.
Returning to the main story, the next important date for Bitcoin treasury companies is November 11, when MSCI is expected to identify which companies will be excluded under its revised methodology. Until then, the potential selling pressure remains a scenario rather than a confirmed outflow. The eventual impact will depend on which companies are affected, how index-tracking investors respond, and whether other index providers adopt similar approaches.
Before we finish, a brief update about Ahead of the Curve itself. We've decided to pause the podcast for now. When we started this initiative, the idea was to explore how AI could help us make K33's research more accessible through new formats. It's been a valuable experiment, and we've learned a great deal along the way. For now, we've decided to put the podcast on hold while we focus our efforts elsewhere. That certainly doesn't mean we're slowing down our work with AI. Quite the opposite. We continue to explore and apply the technology at full speed across other parts of the business. And importantly, our research continues as normal. The regular reports, market updates, and analysis from K33 Research will still be published as usual. We may also bring the podcast back at some point, perhaps in a slightly different form. We'll see.
Finally, thanks to everyone who has been listening. We'd also really appreciate your feedback. Whether it's something you've enjoyed, something we could have done differently, or ideas for what you'd like to see from us going forward, please don't hesitate to reach out. In the meantime, you can continue following our research at https://k33.com/research. Thanks for listening to Ahead of the Curve, and hopefully we'll be back on the air at some point.
