MSTR Removal from NASDAQ 100? Markets May Be Overinterpreting Morgan Stanley’s Latest Note

TradingKey - Indexing giant MSCI's proposal to remove companies with significant crypto holdings from its global investable market indices is drawing strong opposition from the crypto community. JPMorgan's latest research report has also sparked discontent.

【Source: X】

MicroStrategy founder Michael Saylor responded immediately on Friday, stating that MicroStrategy would not be defined by index classifications and maintains a long-term strategy to build the world's first digital currency institution.

Meanwhile, JPMorgan's latest research report suggests that if MicroStrategy is ultimately delisted, it could trigger $2.8 billion in forced selling. The market may interpret this as JPMorgan attempting to exacerbate negative sentiment for MicroStrategy, which is already experiencing declines.

This report ignited significant controversy for JPMorgan, which faced fierce criticism from the Bitcoin community. MicroStrategy supporter Freddy Krueger called for a "boycott" of the financial services giant, even going so far as to label JPMorgan a "criminal enterprise."

Bitcoin advocate and real estate investor Grant Cardone declared, "I just pulled $20 million from Chase [JPMorgan's banking arm] and sued them for credit card violations." As the online boycott movement intensified, Bitcoin proponent Max Keiser also urged, "Take down JPMorgan, buy MicroStrategy and BTC."

MicroStrategy's stock has seen a severe decline, far exceeding that of Bitcoin, as BTC itself has fallen from its peak of $126,230 to nearly $80,000.

【BTC and MSTR Price Curve Chart, Source: TradingView】

MicroStrategy founder Saylor has repeatedly maintained an optimistic tone on social media, stating: "Volatility is a gift from Satoshi [BTC's founder] to believers. If Bitcoin went up 2% every month with zero volatility, Warren Buffett would own all the Bitcoin."

As previously stated in a TradingKey article MicroStrategy Stock Analysis, MicroStrategy is currently secure from being delisted from the Nasdaq-100 Index due to non-compliance with the《Nasdaq-100 Index Methodology》regulations, even amidst its current subdued share price.

The MSCI proposal is causing fear and uncertainty within the crypto community. If MicroStrategy were to be delisted, it could lead to massive sell-offs from index funds, once again casting a shadow over Bitcoin, which was just beginning to recover, and causing catastrophic selling pressure for Digital Asset Treasury (DAT) companies worldwide.

_{Note: An emerging public company model whose core strategy involves holding digital assets (such as Bitcoin) as primary reserve assets, amplifying returns through high-leverage investments.}

【Source: Coinmarketcap.com】

As of now, the CMC Crypto Fear & Greed Index stands at 12, indicating a period of extreme fear in the market. This suggests that any slightly negative news could trigger another Bitcoin crash, leading to a downward spiral in prices for both MicroStrategy and Bitcoin.

We believe the market is still overreacting to JPMorgan's latest research report. If the boycott sentiment, fueled by the Bitcoin community, continues to escalate,JPMorgan'sstock price could be hit to some extent, and investors should be mindful of short-term risks.