Analysis: MSCI will not remove Strategy for now, but the implementation of a freeze mechanism will weaken the buying effect of index funds.

According to Mars Finance, on January 8th, MSCI, a global provider of stock and ETF market benchmarks, announced that it will not remove Bitcoin treasury company Strategy from its portfolio for the time being. However, MSCI has simultaneously implemented a technical freeze on the number of shares in these companies. MSCI explained, "MSCI will not increase the number of shares (NOS), foreign inclusion factor (FIF), or local inclusion factor (DIF) for these securities. At the same time, MSCI will also postpone the addition of new securities or size grouping adjustments to all securities on the preliminary list." Through this decision, MSCI has effectively severed the link between new equity issuance and automatic purchases by passive index funds. This move means that the downside risk of "forced selling" triggered by passive funds in the index mechanism has been removed, but at the same time, the "upward driving mechanism" originally inherent in index trading has also been undermined. Since MSCI's technical freeze has blocked the automatic purchase of index funds, Strategy will have to turn to active investors if it wants to obtain new funds in the future, which also poses a challenge to its model of relying on financing to continuously increase its Bitcoin holdings.