Analysis: MSCI Temporarily Excludes the Strategy, but Implements a Freeze Mechanism to Reduce the Index Fund Buying Effect
BlockBeats News, January 8th, global stock and ETF market benchmark provider MSCI has announced that it will temporarily not remove Bitcoin Treasuries companies from its index, however, MSCI has simultaneously implemented a technical freeze on the stock count of these companies. MSCI explained: "MSCI will not increase the Number of Shares (NOS), Foreign Inclusion Factor (FIF), or Domestic Inclusion Factor (DIF) for these securities. At the same time, MSCI will also delay the addition or scale group adjustment of all securities in the preliminary list." With this decision, MSCI has effectively severed the link between new equity issuance and automatic buy-ins from passive index funds.
This move means that the downward risk caused by "forced selling" triggered by passive fund flows in the index mechanism has been removed, but at the same time, the "upward drive mechanism" originally inherent in index trading has also been undermined. Due to MSCI's technical freeze preventing automatic buy-ins from index funds, for Strategy to receive new funds in the future, it will have to turn to active investors, posing a challenge to its reliance on a funding model to continuously increase Bitcoin holdings.
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