In December 2024, MSTR was added to the Nasdaq 100. Less than a month later, MSCI almost kicked it out of global indexes.
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One in, one almost out – the difference is whether passive money can buy automatically. For companies holding bitcoin on their balance sheet ("treasury companies"), that difference is both a lifeline and a shackle.
Step 1: Why Passive Funds Don't Care About Price
Passive index funds do one thing: copy the index. If Apple makes up 1% of the index today, the fund buys 1% of Apple. If MSTR's weight jumps from 0.2% to 0.5% tomorrow, the fund tops up to 0.5%. This buying has nothing to do with price or fundamentals – only with the rules.
When MSTR joined the Nasdaq 100, Bloomberg ETF analysts estimated that passive funds would create about $2.1 billion in buy orders. No roadshow from Saylor, no marketing needed – the money just shows up.
That's the power of passive money: once a stock is in the index, there is a group of buyers who will buy no matter how expensive it gets.
Step 2: What "Not Being Included" Really Means
In October 2025, MSCI proposed removing any company whose digital asset holdings exceed 50% of total assets from its global indexes. That would mean:
Scenario A: If the proposal had passed
- MSTR could have faced $2.8–$9 billion in forced selling by passive funds.
- If other index providers followed, the number would be even larger.
- At the time, MSTR had just recorded a $17.44 billion unrealized loss and its stock had already fallen nearly 60% from the peak. Adding forced passive selling would likely trigger a liquidity crisis.
Scenario B: What actually happened – removal delayed, but a "freeze order" imposed In January 2026, MSCI announced it would not remove treasury companies for now, but it would not increase their share count weight in the index.
Here's what that freeze really means:
- Before: Every time MSTR issued new shares, passive funds had to buy a proportional amount, creating a cycle – issue shares to buy bitcoin, passive funds absorb the new supply, the stock gets a floor.
- Now: MSTR's newly issued shares no longer get bought by passive funds.
- Going forward: MSTR has to rely on active fund managers, hedge funds and retail investors to absorb new shares, not the "buy-no-matter-what" index funds.
Common mistake: Many think "not being removed" is a win, but overlook how a weight freeze fundamentally hits the treasury model. After joining an index, the stock's upside partly came from automatic passive buying. If that feedback loop is frozen, the flywheel loses half its power. Analysts have calculated that if MSTR tried to replicate a $15 billion share issuance under 2025 conditions without passive buying support, the risk of a price correction would rise significantly.
Step 3: Verify the Real Impact – Let the Data Speak
Bitwise CIO Matt Hougan noted when MSTR entered the Nasdaq 100 that during the passive buying, "the stock barely moved."
This tells us two things:
- The passive buying did happen – roughly $2.1 billion in demand was real;
- But the stock didn't jump, meaning the market had already priced in the inclusion well before it happened.
The lesson: getting into an index won't make the stock skyrocket overnight, but not getting in – or getting kicked out – will make it fall hard. The market prices "losing" far more than "gaining."
Risk note: Passive money is rule-driven, not value-driven. It won't buy the dip if a treasury company's mNAV falls below 1; it will just sell ruthlessly when the stock leaves the index. If MSCI later redefines "non-operating company," treasury firms could still be labeled as high-risk investment vehicles.
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Verification Checklist
If you're evaluating a treasury company, don't just look at how many coins it bought. Check these three things:
- Is it in a major index (Nasdaq 100, MSCI World, S&P 500) – that tells you if passive money is backing it;
- Is there a weight freeze – if yes, new shares lose their automatic buyer;
- Any other signs of incoming passive demand – for example, two Vanguard index funds bought about $700 million of MSTR in January 2026, likely driven by index tracking adjustments.
What to watch next: Keep an eye on MSCI's final definition of "non-operating company." If they redraw the lines in 2026 and demand that treasury companies cover debt interest with operating cash flow, a whole new crisis could start. The next time MSTR reports earnings, look first at the "subsequent events" section for any mention of index eligibility or an expanded audit scope.
