MSCI’s Crypto Cut Could Spark $15B Market Stampede

Key Highlights:

• MSCI may drop crypto-heavy firms from the index.
• It is being estimated that $10-$15 billion can be liquidated if crypto-heavy firms are removed from the index.
• Ripple effect could hit Bitcoin and crypto market as well.

MSCI is one of the world’s most powerful index providers. Its indexes are followed by trillions of dollars from passive investors (think of ETFs and mutual funds that automatically buy or sell stocks based on what MSCI includes or removes).

Now, MSCI is considering a rule change, where companies whose business is heavily tied to crypto, like crypto exchanges, mining firms, or firms holding large amounts of Bitcoin, could be excluded from major MSCI indexes.

What This is a Big Deal?

MSCI is considered to be one of the powerful forces that guide the global investment flow. Now this organization is proposing excluding publicly listed companies that hold more than 50% of their assets in digital assets from its Global Investable Market Indexes. The proposal was floated in October 2025 and it is still under review.

A final decision is expected to be rolled out by January 15, 2026, and the implementation of the same may begin as early as February 2026.

This is not just a minor tweak but MSCI’s indexes act like a rulebook for trillions of dollars invested through ETFs and mutual funds. When MSCI changes that rulebook, funds that track its indexes do not get to debate or delay, they must buy or sell immediately to stay in the line.

If the said proposal goes through, companies with heavy crypto exposure could be automatically removed, forcing large institutional funds to dump their shares overnight. That selling pressure would not reflect company performance or future prospects, it would be purely mechanical.

The said impact will not stop at stocks. Many of these companies are deeply tied to crypto markets (through direct bitcoin holdings or through revenue linked to their digital assets). Sharp drops in their prices could spill into the crypto market itself, dragging sentiment lower and potentially prompting asset sales to stabilize balance sheets.

From all of this, it can be deduced that MSCI’s decision can redirect billions in capital in a matter of days, shaking crypto-linked equities and sending ripples into the broader digital asset market, all driven by index rules and not fundamentals.

The 50% Threshold Fuels Controversy

The thing to notice here is that the proposed rule is based on balance-sheet numbers, not on how risky or stable a company’s actual business is. That’s why critics say it is too blunt.

For example, MicroStrategy (now known as Strategy) is the easiest example. The company is known for using Bitcoin as their long-term treasury reserve, similar to how firms hold cash, gold or bonds, not as a speculative side bet. The main business remains enterprise software.

The company currently holds 671,268 BTC. If Bitcoin’s price shoots up, the value of these Bitcoins could suddenly make up more than 50% of the company’s total assets. That alone could push the company out of MSCI’s indexes. This creates a “mark-to-market” trap.

Forced Selling Looms Large

This is not just a theoretical risk, it is very real. Right now, around 39 publicly traded crypto-linked firms, valued at $113 billion are currently in the MSCI indexes. If they get booted, passive funds must sell shares, possibly triggering $10-15 billion in outflows as per TradingView.

JPMorgan estimates that MicroStrategy alone could face $2.8 billion in forced selling. Such concentrated pressure could push stock prices down drastically, even for strong crypto linked companies.

Bitcoin Volatility Risks Escalate

The impact could spill beyond stocks. Big Bitcoin holders, miners, Coinbase, and firms that have large crypto treasuries, could worsen the turmoil.

The cycle would move in this pattern, first shares will fall, which will lead to more removals, forced selling and Bitcoin price swings as companies adjust holdings.

The markets are already uneasy. Investors in MicroStrategy and Coinbase are nervous, pricing in the chance these firms might be excluded before the MSCI deadline.

Broader Blow to Crypto Adoption

If you look at the situation in the long run, the rule could scare institutions away from crypto. It challenges the idea that indexes should be neutral and might draw regulators’ attention to how companies hold crypto moving ahead.

Firms could try to avoid removal by raising cash, borrowing or moving assets, but these moves focus on staying in the index, not on smart business decisions.

Also Read: Bitcoin (BTC) Dips Below $87K After Strategy Buys 10,645 BTC