Bitwise CIO: Strategy Will Not Sell Its Bitcoin Holdings

BlockBeats News, December 4, according to The Block, Bitwise Chief Investment Officer Matt Hougan refuted claims that Strategy (formerly MicroStrategy) may be forced to sell its Bitcoin holdings. He stated that this premise is “completely wrong,” and pointed out that neither index adjustments nor market pressure require the company to sell its Bitcoin. In a report, Hougan responded to a large number of recent inquiries he received, mainly focusing on two questions: whether Strategy will be removed from the MSCI index, and whether such an adjustment would 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 indices and plans to make a decision on January 15. JPMorgan recently estimated that if Strategy is removed, it could trigger up to approximately $2.8 billion in passive fund sell-offs of its stock. Hougan also judged that the probability of Strategy being excluded is about 75%. However, Hougan pointed out that historical experience shows that the impact of index inclusion and exclusion on prices is much less than investors generally fear. He mentioned that when Strategy was included in the Nasdaq 100 index last year, passive funds were forced to buy about $2.1 billion of its stock, but “the stock price barely fluctuated.” He added that the decline in Strategy’s stock price since October 10 was likely the market pricing in the possibility of exclusion in advance, and he does not expect any “significant two-way sharp fluctuations” in the future.