Bitcoin Slips Despite MSCI's Crypto-Friendly Index Decision
Bitcoin (BTC) took an unexpected dip to near $91,550 on Wednesday after index provider MSCI announced that cryptocurrency treasury companies would remain in its global benchmarks. The news was a welcome relief for markets, which had been under pressure since October due to uncertainty over the treatment of digital asset firms.
MSCI's decision came as a surprise to many, given the initial proposal to exclude such firms from its indexes. However, the index provider ultimately decided to maintain current treatment for companies whose crypto holdings exceed 50% of total assets.
The move was seen as a significant development in the cryptocurrency space, with analysts warning that exclusion could trigger $10 billion to $15 billion in forced selling as passive funds divested. Strategy shares rose 6% in after-hours trading following the news, but had fallen 4.1% during Tuesday's session.
Despite MSCI's decision, Bitcoin's decline suggests other factors may be driving recent market weakness, including profit-taking after early January gains. Technical analysts warned that Bitcoin's failure to hold above $94,000 could expose downside toward $88,000-$89,000.