- MSCI’s review on crypto-focused companies sparked the October 10 sell-off tied to Digital Asset Treasury exposure.
- MicroStrategy faced steep losses as investors reacted to possible index exclusion and passive fund outflows.
- Markets now watch MSCI’s January 15 decision, which could influence volatility and future index eligibility.
Crypto markets saw a severe dip on October 10, 2025, after a sharp liquidation struck major tokens and digital-asset equities. The event happened globally in a single trading day and involved large positions tied to Digital Asset Treasury firms, according to commentary from Ran Neuner. He linked the drop to an MSCI review that raised new concerns over companies like MicroStrategy.
MSCI Consultation and Market Stress
Neuner highlighted that MSCI released a consultation on October 10 that questioned how to classify firms holding digital assets as core business assets. The proposal examined whether companies with more than 50% of their assets in Bitcoin or similar holdings should instead be treated as funds. This change would remove them from global investable indices, which many passive vehicles track.
Because passive index funds must follow index rules, Neuner noted that a removal would lead to automatic selling. He pointed out that MSCI oversees indices representing about $18.3 trillion. He further stated that MSCI often sets precedents that other major index providers, including S&P Dow Jones and FTSE Russell, may later follow.
MicroStrategy’s Decline
As Neuner explained, MicroStrategy’s stock performance moved in tandem with the October decline. He said the stock fell about 50% after the MSCI announcement and that the market linked the drawdown to the possible exclusion. According to his remarks, roughly $9 billion of MicroStrategy’s market cap sits in passive exchange-traded products, which exposed it to significant outflow risk.
Neuner also said the company’s model relies on raising capital to accumulate Bitcoin and to secure inclusion in major indices. Because of that, he argued that an exclusion would undermine the structure used by Digital Asset Treasury companies during this cycle.
Timeline Extends Market Uncertainty
The consultation runs until December 31, with MSCI scheduled to release its conclusion on January 15, 2026. Neuner said traders expect volatile conditions until that date because any negative decision would take effect in February. He added that the October 10 liquidation showed early positioning by market participants who spotted the MSCI document before it gained wider attention.
