Julian Hosp, founder of Cake DeFi, has expressed concerns regarding a potential delisting of MicroStrategy from key indexes driven by MSCI. He suggests that such a move could lead to a significant drop in Bitcoin’s price, posing a risk that investors should consider before the markets react. Hosp shared these insights on the social media platform X.
“50% Crash Risk for Bitcoin Due to Strategy Delisting Death Spiral,” said Hosp. “Bitcoin could experience a massive shock in the coming weeks that no one is talking about. And no, it has nothing to do with charts. It’s about the delisting by MSCI. Anyone who invests professionally should understand this before the market decides. dailysnippet.”
According to Hosp’s post, which summarizes his “Daily Snippet,” MSCI’s consultation on excluding crypto-treasury companies like MicroStrategy from its equity indexes could present a greater threat to Bitcoin than any chart pattern. He outlines a possible “death spiral” scenario: index funds being forced to sell MicroStrategy shares, leading to pressure on its stock and financing, subsequent Bitcoin selling, and further price weakness affecting both the stock and the broader market. Hosp frames this as a structural risk that few Bitcoin holders are monitoring and urges professional investors to review MSCI documents before any decision is made.
MSCI plays a significant role in this context due to its influence over $18.3 trillion in assets linked to its indexes. Even minor classification changes can result in substantial passive flows. A recent note from JPMorgan analysts estimated that removing MicroStrategy and similar digital-asset-treasury names from MSCI benchmarks could lead to approximately $2.8 billion in selling from index-tracking funds, with potential outflows reaching $8–9 billion if other families like Russell follow suit. MSCI has initiated a formal consultation on whether companies with balance sheets dominated by crypto holdings should remain in traditional equity indexes, with a decision expected by mid-January 2026.
MicroStrategy sits at the center of this debate due to its substantial Bitcoin holdings—around 650,000 Bitcoins or roughly 3% of total supply—valued at over $50 billion at recent prices. The company has funded these holdings through common stock, preferred issues, and approximately $6–8 billion of convertible debt. As Bitcoin has declined about 30% from its October peak, MicroStrategy’s stock has fallen by more than half, raising concerns about leverage and refinancing risks. Commentators warn that forced index selling could exacerbate volatility for both MicroStrategy’s stock (MSTR) and Bitcoin itself—a scenario Hosp identifies as having the potential for a 50% crash risk.
Dr. Julian Hosp is an Austrian-born former ER doctor who transitioned into blockchain entrepreneurship after co-founding TenX and later launching Cake DeFi in Singapore in 2019. The company aims to provide retail investors with transparent access to staking and other decentralized finance (DeFi) yield strategies. Cake DeFi claims rapid growth within Southeast Asia’s digital-asset platforms, managing over $1 billion in customer assets.
