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Bitcoin Updates: ETFs and Treasuries—How Their Structural Competition Is Transforming Bitcoin’s Price Trajectory

Bitcoin Updates: ETFs and Treasuries—How Their Structural Competition Is Transforming Bitcoin’s Price Trajectory

Bitget-RWA2025/11/30 12:22
By:Bitget-RWA

- MSCI proposes excluding firms with over 50% crypto assets from major indexes, risking $8.8B in forced sell-offs if adopted. - JPMorgan estimates $2.8B outflows from MSTR alone, highlighting fragility of crypto-treasury stocks reliant on convertible debt. - Bitcoin's exposure shifts to ETFs like BlackRock's IBIT (6.8% BTC supply), offering safer BTC exposure than equity-linked treasuries. - Fed policy, MSCI's DAT ruling, and derivatives volatility will determine BTC's $91K breakout potential amid structur

Bitcoin Faces Uncertainty Amid Fed Policy and Institutional Shifts

As the U.S. Federal Reserve approaches key decisions on interest rates, speculation is mounting over Bitcoin’s future direction. Market participants are watching closely to see if Bitcoin can surpass the $91,000 mark. However, the potential for further gains may depend on significant changes in how institutional funds enter the cryptocurrency market, influenced by regulatory developments and shifting market conditions.

One major factor stirring debate is MSCI’s proposal to remove companies with more than half of their assets in digital currencies from its Global Investable Market Indexes. If this policy is enacted, passive investment funds could be compelled to divest billions from firms such as MicroStrategy (MSTR), which currently holds over $9 billion in digital assets. JPMorgan has projected that reclassifying MSTR alone could result in $2.8 billion in outflows, and if other index providers follow, total withdrawals could reach $8.8 billion. This consultation, expected to conclude by the end of 2025, highlights growing concerns among institutions about the risks posed by companies whose primary value comes from holding Bitcoin rather than generating operational income. According to DLA Piper, the number of such proxy firms in the U.S. has grown to over 200, with their combined market capitalization rising from $40 billion in 2024 to $150 billion in 2025. These companies often rely on convertible debt and face the threat of forced asset sales if their stock prices fall below the value of their crypto holdings, creating a precarious environment.

At the same time, more Bitcoin exposure is shifting into regulated exchange-traded funds (ETFs), which now collectively manage assets exceeding $100 billion. BlackRock’s IBIT fund alone holds 6.8% of all circulating Bitcoin. This migration is accelerating as MSCI’s proposed changes drive capital away from equity-based crypto holdings and into ETFs, which provide direct Bitcoin exposure without the balance sheet risks. For Bitcoin, this trend could be neutral or even beneficial if ETF inflows balance out the selling pressure from treasuries. However, it may create liquidity challenges for affected stocks. ETFs, with their exclusive focus on Bitcoin, further cement its dominance over other cryptocurrencies, even as some treasuries experiment with alternatives like Solana or Ethereum.

Bitcoin and Market Dynamics

Broader economic factors add to the complexity. The Federal Reserve’s upcoming December decision, with a 78% chance of keeping rates above 3.5%, remains a crucial event. A more accommodative stance could encourage risk-taking, while weak employment data or trends in artificial intelligence investment might delay any rate cuts. Additionally, changes in regulations and MSCI’s final decision on digital asset treasuries could significantly influence market sentiment. While Michael Saylor of MicroStrategy has defended his company’s status as an operating business, smaller firms may not have the same flexibility and could be forced to reduce their crypto holdings or sell assets.

Meanwhile, the derivatives market is signaling caution. The monthly expiration of $13.3 billion in options, with a put-call ratio of 0.66 and a “max pain” point at $102,000, indicates that traders are positioning defensively. The $80,000 put option has become the most popular on Deribit, reflecting a bearish outlook amid ongoing volatility. Additionally, Bitcoin’s price has shown a strong correlation with the S&P 500—historically over 70%—suggesting its movements are increasingly influenced by broader equity markets.

Looking forward, whether Bitcoin can break through the $91,000 barrier will depend on several interconnected factors: the Federal Reserve’s policy decisions, the outcome of MSCI’s review of digital asset treasuries, and the resilience of the derivatives market. While a shift from treasuries to ETFs could provide upward momentum, risks related to liquidity and forced selling from underperforming stocks could counteract these gains. For now, the market remains finely balanced, with structural changes and macroeconomic signals set to determine Bitcoin’s next major move.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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