Is the countdown to Strategy being excluded from the index an opportunity or a trap? The key is to see if the 'financing flywheel' can be turned on According to BlockBeats, on October 20th, market analyst Murphy announced that MSCI officially approved new regulations on October 15th, excluding non operating companies that do not meet the criteria from the global investable market index. In the previous simulation screening, MSTR (Strategy) has been included in the proposed exclusion list, and the final result will be announced on November 11th and take effect on November 30th. After the announcement, MSTR fell sharply. At present, funds tracking related indices hold approximately 13 million shares of MSTR, valued at nearly $1.8 billion, equivalent to 60% of its 30 day average daily trading volume. Although this passive selling pressure is significant, it is not difficult to digest. What is truly worth paying attention to is where the future active demand lies. In today's mature BTC spot ETF market, why don't investors directly buy ETFs and have to bear additional management fees, financing costs, and stock dilution risks to buy a company that only holds BTC? Strategy must prove that it can sustain the growth of net BTC equity per share through capital operations. This leads to the core logic of MSTR's "financing flywheel". Assuming the company holds 100 BTC and issues 100 shares, each corresponding to 1 BTC. If the market offers a 1.5 times premium (mNAV), issuing 20 shares can raise funds equivalent to 30 BTC. After buying, the position increased to 130 shares, the total number of shares increased to 120 shares, and the coin content per share increased to 1.083 shares. Even if the BTC price remains unchanged, the equity of existing shareholders has increased. But there are two prerequisites for the establishment of the flywheel: the market must be willing to provide sufficient premium, and the premium contraction cannot offset the equity growth. Therefore, the investment return of MSTR depends on three variables: BTC price, net BTC equity per share, and mNAV (the premium that the market is willing to pay). Based on these three variables, MSTR will have three paths in the future. Path 1: BTC rises and mNAV expands synchronously, MSTR will gain dual benefits of asset appreciation and valuation expansion, significantly outperforming BTC. Path 2: BTC rises but mNAV remains low, MSTR may still outperform with capital amplification effect and per share equity growth, but excess returns only come from asset appreciation. Path 3: BTC rises but mNAV continues to compress. If equity growth cannot offset valuation contraction, MSTR will outperform BTC. In July of this year, Strategy revised its mNAV caliber and closed at 1.08 times on October 16th, with a relatively limited premium. Ultimately, buying BTC is about laying out the long-term value of the asset itself, while buying MSTR adds an extra layer of recognition of Saylor's capital management capabilities. [Original link]