MSCI Index continues to favor MicroStrategy! MSTR rises over 6% after hours, but analysts warn: the game is not over yet

Global index provider MSCI announces that it will temporarily retain the eligibility of digital asset treasury companies (DAT) within its indices, prompting a post-market surge in MicroStrategy MSTR’s stock price. However, analysts warn that the review of non-operating companies has not concluded, and long-term risks still exist.

MSCI Index Continues to Include MicroStrategy, MSTR Shares Surge After Hours

MicroStrategy (now Strategy), a Bitcoin reserve company, saw its stock MSTR jump over 6% after hours early this morning (1/7). The main reason is that global index giant MSCI has decided not to remove digital asset treasury companies (DATs) from its global indices for now.

Image source: Google Finance MSCI Index continues to include MicroStrategy, MSTR shares soar after hours

MSCI stated that distinguishing pure investment companies from those that view digital assets as core operational assets still requires further research and consultation. Therefore, for companies where digital assets account for more than 50% of total assets, the current index inclusion rules will remain unchanged.

This decision greatly alleviates market concerns, as although MicroStrategy holds a large amount of Bitcoin on its balance sheet, it does not operate blockchain businesses directly. If it were formally removed, institutional investors tracking the index would be forced to sell shares, putting significant downward pressure on the stock price.

Billions of Dollars in Passive Funds Temporarily Avoid Outflows

MSCI’s decision also temporarily spared MicroStrategy from a large outflow of passive funds.

JPMorgan had warned that, if MSCI and major indices like Nasdaq 100 and MSCI World remove MicroStrategy, they could face billions of dollars in passive fund outflows.

According to statistics, out of the 39 companies classified as digital asset treasury companies, about 18 are already MSCI index constituents, which were originally at high risk of being removed. Fortunately, MSCI has confirmed that as long as these companies meet other established criteria, they will continue to be included in the index.

Further reading:
MSCI Might Remove MicroStrategy? JPMorgan: Bitcoin Exposure Could Trigger Massive Passive Fund Withdrawals

Is This a Temporary Reprieve or a Full Victory?

Although MicroStrategy has not been removed from the MSCI index for now, TD Cowen analyst Lance Vitanza remains cautious.

He explicitly states that it’s still uncertain whether this is a victory for MicroStrategy or just MSCI’s “reprieve.”

Benchmark analyst Mark Palmer believes that MSCI’s decision gives MicroStrategy some breathing room. The company previously strongly opposed being removed, which may have influenced the outcome.

Image source: Strategy official website, previous letter opposing MSCI index removal

However, Palmer also warns that MSCI’s decision to further review the definition of non-operating companies indicates that the battle between DAT companies and global indices is far from over.

Nonetheless, both Vitanza and Palmer give MicroStrategy a buy rating, with target prices of $500 and $705 respectively.

DAT Companies Still Face Long-term Review Risks

It is important to note that, if MSCI revises its rules in the future to broadly exclude non-operational companies, MicroStrategy could face a new round of review and potentially lose its position in key market indices.

For now, the market remains cautiously optimistic about MicroStrategy and similar companies. With the temporary alleviation of the passive fund outflow crisis, capital may flow back into related sectors, further boosting market sentiment.

Further reading:
Will the 2026 Crypto Reserve Winter Arrive? Hoarding Mode Faces Elimination Race, Most DAT Companies May Not Survive