Can MicroStrategy continue to stay in mainstream indices? Experts warn: The Bitcoin version of the Trojan Horse is threatening TradFi.

Recently, it has been reported that index provider MSCI is considering reclassifying MicroStrategy (NASDAQ: MSTR) from a traditional “operating company” to an investment vehicle or a quasi-ETF structure. This move could affect its status in the MSCI World and US indices and further trigger selling pressure from passive funds amounting to $9 billion.

Despite MicroStrategy Chairman Michael Saylor responding to MSCI's investigation, an increasing number of financial and cryptocurrency market observers point out that the risk nature of MSTR has shown a clear divergence from traditional stocks. The issue lies not only in classification but also in the underlying systemic impacts.

( MicroStrategy founder responds to MSCI reclassification threat: We are not an ETF, we are Bitcoin capital innovators )

Leveraged Bitcoin derivatives? MSTR is not the “tech stock” you think it is.

According to researcher Yu Zhe'an, MicroStrategy's common stock is essentially no longer a reflection of the company's operations or the spot price of Bitcoin, but rather “a derivative financial product of Bitcoin with built-in leverage.”

MicroStrategy has long raised funds through the issuance of bonds, preferred stocks, and convertible securities, investing large amounts of capital to purchase Bitcoin. As of November 2025, the company has accumulated over 640,000 Bitcoins, valued at over $50 billion, and has never sold any of its holdings. This operation forms a financial cycle of “issuing bonds to buy coins → stock price rises → passive funds buy in → further fundraising,” creating a leveraged flywheel.

“This special leverage structure, once it enters the mainstream stock price index, will produce profound and complex chain reactions,” said Yu Zhe'an.

The “Trojan Horse” Effect: How MSTR Pollutes Index Risk Attributes?

Yu Zhe'an further warned that when MSTR enters mainstream indices such as the S&P 500 or MSCI World, although the initial weight may not be high, its extremely high beta value (volatility) will have a “disproportionate” impact on the overall risk structure of the index. He described this phenomenon as a “Bitcoin version of the Trojan Horse”:

“It appears to be a software company, but in reality, it represents a leveraged Bitcoin fund. This quietly injects the risks of highly volatile crypto assets into the core stock price index, which is fundamentally stable.”

For passive funds that emphasize minimizing tracking error, this is undoubtedly a form of “index pollution.” Especially in a bull market, MSTR can accelerate gains; however, during bear markets or Bitcoin crashes, the leverage backlash effect will amplify the decline, causing destructive impacts on index performance.

Concerns in the asset management industry: Trust and business models are facing challenges.

The logic behind index construction has always been the core reason for fund managers to choose index licenses. Yu Zhe'an pointed out that if companies like MicroStrategy, which are essentially “leveraged asset holding companies,” can easily mix into operational company indices, it will lead to a style drift in the overall index, thereby undermining the asset allocation models and risk management frameworks of institutional investors (such as pension funds).

“This will cause abnormal fluctuations in fund performance, eroding investors' trust in index products, and asset management companies may be forced to change their tracking targets, thereby harming their business foundation.”

In other words, the question is not just whether MSTR can be classified as a company, but rather the core challenge of whether the entire trust mechanism of the passive investment system can be sustained.

Fixing system loopholes is only a matter of time; index companies will inevitably defend.

Yu Zhe'an believes that the actions of index companies such as MSCI are actually aimed at closing institutional loopholes and responding to the fundamental concerns of the asset management industry. He predicts:

“The outcome of the game between DAT and the index companies is already very clear. The index companies will not allow the leveraged fluctuations in cryptocurrency prices to hijack the core index products.”

In the future, not only MSCI, but other index providers such as S&P Dow Jones, FTSE Russell, etc. are also likely to follow suit and adjust the rules, reclassifying such high volatility, non-traditional operational-oriented companies and isolating their risks from core constituents.

Can MicroStrategy continue to stay in mainstream indices? Experts warn: The Bitcoin version of the Trojan Horse is threatening traditional finance. Originally appeared in Chain News ABMedia.