Scott Melker discusses the latest bitcoin (BTC-USD) sell-off and the implications for Michael Saylor's Strategy (MSTR) as MSCI revises its index eligibility guidelines. Melker examines how the changes could affect Strategy's index inclusion

In a risk-off environment, Bitcoin obviously has taken it on the chin more than other assets. Last night, obviously, it sold down as far as $67,000, not the best price action that you would want to see in what we assumed was a renewed bull market. And part of the

bad news, bad news, I'm going to air quote it right there. Part of the bad news here is what happened to strategy. Strategy, the world's biggest corporate Bitcoin holder to be dropped from MSCI indexes. Strategy described the proposal as discriminatory,

arbitrary, and misguided, and encouraged shareholders to oppose it. So we thought that this might be coming as we reported in the past on MSCI likely changing their rules on what qualified a company to be a part of their index. And they had been adding pretty aggressive language about the operating business having to have actual income and it couldn't basically just be a treasury company that was holding an asset as a business. So

we knew this was likely coming. Strategy was removed, Metaplanet was removed, Upexi, Solana Treasury company, who I happened to share space with here in the offices in Tampa. They were also unfortunately removed, but this was not only Bitcoin, not only Solana, also Yellow Cake, which is a uranium holding company. They were also removed as well as some agriculture companies in Europe and others. No Bitcoin was actually mentioned specifically in the language.

Sharplink actually, uh, is also on the list, but interesting, was not deleted. So, obviously, as I said, Sailor says that this is discriminatory, arbitrary, arbitrary and misguided. Now, interestingly, you can look at a company like Berkshire Hathaway,

uh, Warren Buffett's company, which effectively just buys and holds stocks for a living. Of course, they do actively trade, but they're not a operating business per se, and they're not being targeted by index funds. So it does seem like it's certain assets here that are being picked on. So, let's talk about the numbers here. Obviously, strategy uh was down on the news when it happened about 7% that day.

JP Morgan said that this would be about $2.8 billion in forced outflows as a result of this, which is less than the daily volume of MSTR. So this shouldn't actually be that big of a deal, but when you're delisted from an index, that index obviously has to sell all the shares that they've been holding to keep you in index, which points selling pressure on the on the uh stock. So they're still listed on NAS

DAQ. I've seen some crazy reports about what this could possibly mean. The question is whether other indexes are going to see this as a signal and decide to do the same thing to our beloved Treasury companies, but there's no evidence beyond the news saying it could happen that that has any chance of actually happening. So, listen, a little bit of selling pressure here on MSTR, but to be very clear, that does not mean that they have to sell any Bitcoin, another thing that I've seen reported. This has nothing to do with the Bitcoin holders

of MSTR. It really has nothing to do, uh, excuse me, with the shareholders of MSTR for them selling their Bitcoin. And it definitely has nothing to do with Bitcoin in general.