For over a month, the crypto market has been experiencing persistent weakness, with no clear explanation gaining consensus. Starting on October 10th, each recovery attempt has been forcefully rejected. Today, the true reason behind this decline seems to have finally surfaced, posing a structural threat that could jeopardize a key aspect of this bullish cycle.
The mystery of October 10th stems from a discreet yet cataclysmic announcement by MSCI, the world’s second-largest index provider. On that day, MSCI launched a consultation to determine whether companies whose primary business is holding crypto. Such as Saylor’s MicroStrategy (MSTR), should be classified as “companies” or “funds”. This distinction, which may seem technical, is in reality a sword of Damocles hanging over the market.
To understand what’s at stake, we need to revisit the role of Digital Asset Treasuries (DATs) in the current bull run. Companies like MicroStrategy have been one of the two major buying forces of this cycle. Their strategy is simple yet devastatingly effective: buy Bitcoin aggressively, watch their stock value increase. And thus gain entry into major stock indices like the S&P 500. Once included, billions of dollars in passive funds (pension funds, trackers, etc.) are forced to buy their shares, which further drives up their value and allows them to buy even more Bitcoin. A virtuous circle that has largely fueled the rally.
The problem is that if MSCI decides to reclassify these DATs as “funds,” they will be immediately and automatically excluded from all passive indices. The reason is straightforward: including a fund in an index creates a feedback loop deemed unhealthy (the fund buys assets, its size increases, it’s included in more indices, which forces it to buy more assets, and so on).
The consequences of such a decision would be devastating. First, it would trigger massive forced selling of these companies’ shares by all passive index funds, causing their stock price to collapse. Second, it would destroy their business model, whose cornerstone is precisely this index inclusion. The primary source of institutional demand for this cycle would disappear overnight.
According to renowned analyst Ran Neuner, the smart money understood this existential risk as soon as the October 10th announcement was made. That’s why the market began falling precisely on that day and has never managed to find solid support since. The latent selling pressure is immense, as sophisticated investors have positioned themselves in anticipation of the worst.
The market is now hanging on MSCI’s final decision, which will be announced on January 15, 2026. This date has become the new tipping point for the entire crypto ecosystem.
In the meantime, the market is likely to remain under pressure. The current weakness is not random, but the direct consequence of a fundamental threat weighing on the very structure of institutional demand for cryptocurrencies. January 15th will be judgment day.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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