BlockBeats News, December 4th, according to The Block, Bitwise Chief Investment Officer Matt Hougan refuted the claim that Strategy (formerly MicroStrategy) may be forced to sell its Bitcoin holdings. He called this premise “completely wrong” and pointed out that there is no requirement for the company to sell Bitcoin, whether due to an index adjustment or market pressure.
In a report, Hougan responded to the numerous inquiries he has recently received, primarily focusing on two issues: whether Strategy will be excluded from the MSCI index and whether this adjustment will force the company to unwind its multi-billion-dollar Bitcoin holdings. Hougan acknowledged that MSCI is indeed considering excluding digital asset treasury companies from its investable indexes and plans to make a decision on January 15th. JPMorgan recently estimated that if Strategy is removed, it could trigger passive funds selling approximately up to $2.8 billion of its stock. Hougan also assessed the probability of Strategy’s exclusion to be around 75%.
However, Hougan pointed out that historical experience suggests that index inclusions and exclusions have a much smaller impact on prices than investors generally fear. He mentioned that when Strategy was included in the Nasdaq 100 index last year, passive funds were forced to buy around $2.1 billion of stock, but “the stock price hardly fluctuated.” He added that the recent decline in Strategy’s stock price since October 10th is likely the market pricing in the possibility of exclusion in advance, and he does not expect to see “significant two-way volatility” in the future.
