Analysis: MSCI's "Hidden Clause" may cut off incremental Strategy capital inflows

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PANews January 8 News, according to CryptoSlate, the global stock and ETF market benchmark provider MSCI has announced that it will temporarily not remove Bitcoin treasury company Strategy. However, a hidden clause, “MSCI will not implement any increases to the Number of Shares (NOS)MSCI will not execute any increase operations for this security’s share count (NOS),” has attracted community attention. This clause means that shares issued through ATM by Strategy will not be included in the MSCI index weight, nor will they trigger passive fund purchases. In other words, MSCI recognizes the existence of cryptocurrency reserve stocks but refuses to continue providing passive capital for ATM issuance. Even if Strategy issues more shares, passive funds will not follow to buy, cutting off incremental capital and breaking the “infinite capital cycle” where Strategy relies on issuing new shares to buy Bitcoin, which is then forcibly bought by ETFs to support the stock price. It is reported that besides Strategy, other potential affected Bitcoin treasury companies include Metaplanet and Capital B.

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