“Is a Mass Sell-Off Coming?” Strategy Faces MSCI Exit Risk as Bitcoin Slides, With Japan Rate Hike Adding Pressure

‘Largest Corporate Bitcoin Holder’ Strategy Faces Risk of Removal From Major MSCI Indexes
Bitcoin Value Plunges, mNAV Falls Below 1, Fueling Fears of Large-Scale Selling
Rising Odds of Japan Rate Hike This Month Point to Further Bitcoin Price Declines

Strategy, the world’s largest corporate holder of Bitcoin and a digital asset management firm, is increasingly seen as facing possible removal from MSCI (Morgan Stanley Capital International) indexes. As Bitcoin prices plunge, market skepticism over Strategy’s business model has intensified, while MSCI’s signals of potential changes to index inclusion criteria have heightened concerns. Some in the market warn that if Strategy resorts to large-scale Bitcoin selling to weather the crisis, it could rattle the broader cryptocurrency market.

Could Strategy Disappear From MSCI?

As of December 17, 2025, cryptocurrency industry sources say global investment banks have recently been issuing a wave of forecasts that Strategy could be removed from major MSCI indexes in early next year. The view is that, under MSCI’s upcoming criteria overhaul, Strategy could lose eligibility for index inclusion. In October, MSCI said that “digital asset treasury management companies may resemble investment funds that are not eligible for index inclusion,” and announced it would begin a consultation (expert feedback process) on a plan to exclude from its indexes companies whose assets have more than 50% exposure to cryptocurrencies such as Bitcoin. The consultation will run through December 31, and the final decision is reportedly expected on January 15, 2026.

In a recent report, J.P. Morgan went as far as to directly predict that “Strategy could be removed from benchmark indexes such as ‘MSCI USA’ and the ‘Nasdaq 100.’” As the price of Bitcoin—accumulated through Strategy’s strategic buying—has fallen sharply, the bank said, market participants’ anxiety about Strategy’s profitability has intensified. J.P. Morgan estimated that if Strategy is removed from MSCI indexes, up to $2.8 billion in passive investment funds could flow out, and warned there is also a risk of additional outflows from other index providers.

Concerns are also growing that Strategy could sell Bitcoin in large quantities. That is because its market net asset value multiple (mNAV), which compares the value of its cryptocurrency holdings with its market capitalization, has slid toward 1x—raising the likelihood that Strategy may dispose of some of its Bitcoin holdings. Previously, Strategy CEO Phong Le said, “If mNAV falls below 1 and external fundraising becomes difficult, we could sell Bitcoin,” adding that “this is close to a last resort.” Strategy’s mNAV reportedly fell below 1x for the first time in three years last month and has continued to hover around 1x. When mNAV is below 1x, it means the company is valued at less than the Bitcoin it holds.

Strategy Builds a “Breakwater” Before Any Bitcoin Fire Sale

The press has warned that if Strategy were to launch a large-scale Bitcoin sell-off, the crypto market could face a “major crash.” The Financial Times, citing crypto data analytics firm Kaiko, reported that “once a sell-off begins and prices start to collapse, an endless race to the bottom would begin.” Bloomberg also wrote that “Strategy was once a crypto idol, but is now becoming a cautionary tale,” adding that investors “are paying a steep price due to volatility and leverage.”

Strategy, however, says it is taking steps to avoid selling Bitcoin as much as possible. The company recently disclosed that it raised $1.44 billion in cash by selling its own shares in the New York stock market. It said the move is meant to cover debt interest payments and preferred dividend obligations without having to sell its Bitcoin holdings during a market rout. CEO Phong Le stressed, “This reserve will be our primary means of paying preferred dividends and debt interest,” adding that “the funds secured so far are sufficient to cover all dividends and interest payments for the next 21 months.”

Strategy’s goal is to expand the reserve further to secure at least 24 months’ worth of payment capacity. Michael Saylor, the company’s co-founder and chairman, likened it to a “battery”: storing energy produced by a powerful but volatile “reactor” called Bitcoin in a dollar cash reserve, so the company can deliver stable returns (dividends) to shareholders regardless of market swings. The approach is also seen as a signal that Strategy aims to eliminate recurring market concerns about margin calls (demands to meet collateral shortfalls) at the source.

Growing Risk of an Unwind in the “Yen Carry Trade”

The problem is that, regardless of whether Strategy ultimately sells, Bitcoin still faces the risk of further downside. That is because the Bank of Japan is widely expected to raise rates at its December 19 monetary policy meeting, factoring in persistent inflation and a weaker currency. Japan’s policy rate is currently around 0.5%, and the BoJ is projected to deliver a 0.25 percentage-point hike at this meeting, lifting the rate to about 0.75%. If that plays out, Japan’s benchmark rate would climb to its highest level in 30 years.

Many crypto investors have long borrowed yen—given its relatively low interest costs—to invest in cryptocurrencies, in what is known as the “yen carry trade.” A BoJ rate hike would imply a large-scale unwinding of yen carry trades, making it difficult for crypto prices to avoid sliding. Cointelegraph, citing research by market analyst Andrew BTC, also suggested that a BoJ hike could significantly drain global liquidity and push Bitcoin down to around $70,000.

Andrew BTC analyzed that since 2024, Bitcoin has fallen by as much as about 26% following BoJ rate hikes. Looking at Bitcoin’s price moves around past hikes, he found that Bitcoin fell 23% in March 2024, 26% in July, and 31% in January 2025. Based on that precedent, he estimated that if the BoJ raises rates this month, Bitcoin could drop roughly 20% to around the $70,000 level.