Inside the JPMorgan boycott drama defending Bitcoin treasuries being kicked off major indexes

American monetary companies firm MSCI’s October session on “digital asset treasury firms” arrived at a time when the mechanics of Bitcoin (BTC) publicity had already begun to fracture.

By mid-2025, three roughly equal-sized channels funneled institutional capital into BTC: regulated spot ETFs managing north of $100 billion, mining operations with embedded BTC publicity, and a more moderen cohort of public firms whose major enterprise had grow to be holding crypto on their stability sheets.

MSCI’s proposal targets the third bucket and, in doing so, forces a reckoning over whether or not these corporations are working firms or passive funds in company costumes.

The proposal itself reads like normal index housekeeping.

MSCI floated excluding from its Global Investable Market Indexes any firm whose digital-asset holdings exceed 50% of whole belongings, and invited suggestions on whether or not corporations that self-identify as digital asset treasuries or increase capital primarily to stack Bitcoin ought to face comparable therapy.

The session window runs via Dec. 31, with a call due Jan. 15 and implementation penciled in for the February 2026 evaluate.

MSCI frames the query explicitly: do these shares “exhibit traits just like funding funds,” which already sit exterior fairness benchmarks?

JPMorgan answered by modeling the fallout. Its November evaluation pegged Strategy’s market cap at roughly $59 billion, with about $9 billion held by passive autos monitoring major indexes.

In a situation through which MSCI alone reclassifies Strategy, roughly $2.8 billion in passive belongings could be pressured to promote. If Russell and different suppliers comply with, mechanical outflows might attain $8.8 billion, in keeping with a Barron’s estimate.

The quantity is framed as the second index shock after Strategy’s earlier exclusion from the S&P 500, and it triggered a backlash. JPMorgan confronted scrutiny over front-running, with public calls to boycott the financial institution and to brief its inventory.

The proxy-stock drawback

The anger displays a deeper rigidity over how Bitcoin beta enters conventional portfolios. DLA Piper’s October advisory documented the sector’s explosive development.

More than 200 US public firms had adopted digital asset treasury methods by September 2025, holding an estimated $115 billion in crypto and sporting a mixed fairness market cap of round $150 billion, up from $40 billion a 12 months earlier.

This is roughly 190 targeted on Bitcoin treasuries, with one other 10 to twenty holding different tokens. For establishments constrained by mandates that prohibit direct crypto holdings, these shares provided a workaround: monitoring BTC via fairness publicity with out breaching compliance guardrails.

However, that comfort got here with structural vulnerabilities. Many newer treasuries financed their purchases via convertible notes and personal placements, and when their inventory costs fell under the worth of the crypto they held, boards confronted strain to promote cash and purchase again shares.

Digital asset treasuries deployed about $42.7 billion into crypto in 2025, with $22.6 billion in the third quarter. Solana-focused treasuries noticed their combination internet asset worth drop from $3.5 billion to $2.1 billion, a 40% drawdown, organising pressured liquidations that would quantity to $4.3 billion to $6.4 billion if even a modest fraction of positions unwind.

At the similar time, spot Bitcoin ETFs crossed $100 billion in belongings below administration lower than a 12 months after launch, with BlackRock’s IBIT alone holding over $100 billion in BTC and roughly 6.8% of the circulating provide by late 2025.

The merchandise provided purer publicity with out balance-sheet leverage or the NAV low cost issues plaguing treasury shares.

MSCI’s session accelerates a rotation already underway. BTC publicity migrates from treasury equities, which grow to be pressured sellers when fairness valuations crack, into regulated ETF wrappers.

For Bitcoin itself, the rotation might be impartial and even optimistic if ETF inflows offset treasury promoting; for the shares, it’s unambiguously liquidity-negative.

For BTC dominance, it arguably reinforces Bitcoin’s structural benefit: the merchandise establishments rotate into are nearly totally BTC-only. At the similar time, some treasuries had began experimenting with Solana, Ethereum, and different tokens.

Company	Ticker	Role in BTC publicity	MSCI standing in DAT evaluate	Approx MSCI parent-index weight*	At-risk passive AUM (order of magnitude)	Liquidity be aware
Strategy	MSTR	Digital-asset treasury BTC	Flagged as core DAT candidate	≈ 0.02% of MSCI ACWI IMI	≈ $2.8B MSCI-linked; as much as ≈ $8–9B whole	Main node for pressured promoting; proxy for BTC beta in equities.
Riot Platforms	RIOT	BTC miner / proxy inventory	Listed on preliminary DAT listing	Very small; fill from terminal	Hundreds of thousands and thousands, not billions	Liquidity-sensitive; high ETF/thematic possession share.
Marathon Digital	MARA	BTC miner / proxy inventory	Listed on preliminary DAT listing	Very small; fill from terminal	Hundreds of thousands and thousands, not billions	Similar profile to RIOT; extra risky free float.
Metaplanet	3350	BTC treasury (Japan)	MSCI has frozen upgrades/modifications	Tiny; small-cap / nation index	Tens of thousands and thousands	Non-US instance; reveals world attain of rule.
Capital B and different DATs	Various	BTC-heavy DATs / miners	On wider 30–40 identify DAT watchlist	Tiny individually	Collective “lengthy tail”	Together, type a second tier of liquidity threat.

Liquidity below stress

The equity-side mechanical flows are easy. Index funds benchmarked to MSCI can’t change Strategy with a Bitcoin ETF. They rotate into no matter fills the index slot.

From BTC’s perspective, that is an equity-liquidity shock, not an computerized coin-selling shock, but the second-order results matter extra.

Treasury firms going through weaker fairness help and tighter funding circumstances will both cut back future purchases or, in some circumstances, liquidate holdings to shore up their stability sheets.

Strategy has signaled it gained’t promote BTC to remain below any threshold; as an alternative, it’s reframing itself as a “Bitcoin-backed structured finance firm,” doubling down on the concept that it’s an working enterprise, not a fund.

Smaller treasuries with weaker stability sheets might lack that luxurious.

Russell and FTSE Russell haven’t launched formal consultations on digital asset treasuries, however JPMorgan’s $8.8 billion outflow situation assumes different major suppliers will converge on MSCI’s therapy over time.

FTSE Russell stays deeply concerned in digital-asset indexing on the token aspect. However, its fairness methodology doesn’t but carve out treasuries as a separate class, they’re nonetheless handled like sector shares.

DLA Piper’s advisory reads as a warning that regulators and gatekeepers, together with indexers, are reviewing treasury disclosures extra carefully, which helps the plausibility of a copycat wave even when it hasn’t began.

MSCI’s transfer forces establishments to resolve whether or not Bitcoin belongs in fairness benchmarks or in devoted crypto merchandise.

The session is methodological, however the stakes are structural: it determines whether or not BTC beta sits in ETFs and a handful of huge company treasuries, or in a extra dispersed ecosystem of smaller balance-sheet holders who grow to be pressured sellers when markets flip.

The reply reshapes not simply index weights, however the focus of Bitcoin possession itself.

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