Bitcoin Faces 25% Decline Risks Amid MSCI–Strategy Faceoff

Bitcoin (BTC) is entering a turbulent phase as global index provider MSCI evaluates whether to exclude “digital asset treasury companies,” or DATS, including Strategy (MSTR), from its major equity benchmarks.

MSCI’s Shock Proposal Sends Strategy Into Uncertainty

On Oct. 10, the day the crypto market wiped around $850 billion from its capitalization, MSCI launched a public consultation on whether to remove companies whose business model relies predominantly on holding crypto assets from its flagship global indexes.

That includes Strategy, which holds more than 649,870 BTC on its balance sheet and whose stock has increasingly traded as a high-beta Bitcoin vehicle.

A final decision is expected by mid-January 2026.

But even before MSCI’s review closes, analysts at JPMorgan estimate that an exclusion would trigger forced outflows of up to $2.8 billion from Strategy alone, given the massive amount of passive capital tied to MSCI benchmarks.

Following the announcement, Strategy shares fell sharply, erasing nearly half of their market value compared to their 2025 peak as investors reassessed equity-based Bitcoin exposure.

Strategy has been one of Bitcoin’s largest corporate buyers and a major sentiment driver. Each major rally in BTC has historically coincided with a run-up in Strategy’s shares, which often outperform Bitcoin in bull markets due to embedded leverage.

Therefore, if Strategy faces sustained declines, some investors, especially leveraged traders, may hedge by shorting BTC or reducing their crypto exposure.

Additionally, index expulsion may signal to conservative funds that crypto-heavy balance-sheet strategies are “uninvestable,” thereby dampening long-term Bitcoin adoption among corporations.

Bitcoin’s 2025 bull market has heavily relied on the concept of expanding institutional integration. A ruling that curtails such integration would damage one of BTC’s strongest narratives.

BTC/USD Technical Analysis Points to 25% Downside

Bitcoin has now confirmed a breakdown from a two-year rising wedge, a pattern that typically signals trend exhaustion and marks the start of deeper corrective phases.

The wedge’s lower trendline, which has quietly guided Bitcoin’s entire 2023–2025 uptrend, finally gave way in early November, with BTC failing to reclaim it on multiple retests. That rejection from below is one of the strongest bearish continuation signals in wedge structures.

The rising-wedge measured move, the height of the wedge’s thickest section projected downward from the breakdown point, places Bitcoin’s next major magnet around $65,000–$66,000, aligning with the 200-week EMA (the blue wave).

Conversely, Bitcoin could invalidate the wedge setup if it bounces from the 100-week EMA (the purple wave) support at around $85,500.