Digital asset investment products recorded $288 million in net outflows for the week ending February 21, marking the fifth consecutive week of negative crypto fund flows. This brings cumulative outflows over five weeks to $4 billion. While the pace of withdrawals is significant, it remains below the $6 billion lost over the same period last year, suggesting a more measured market adjustment rather than panic selling. Crypto Outflows Show Divergence as US Investors Lead the Retreat Trading volumes also r ...

Core Insights - Michael Saylor's Strategy faces significant challenges as it risks being removed from major benchmarks like MSCI USA and Nasdaq 100, which could lead to substantial outflows estimated at up to $2.8 billion [1][2][5] - The potential index exit threatens the foundation of Strategy's Bitcoin narrative, impacting institutional credibility and regulated access to Bitcoin for fund managers [3][5] - Strategy's market value has declined significantly, now trading slightly above the value of its Bitcoin reserves, indicating a loss of investor confidence [4][7] Market Exposure - Passive funds linked to Strategy currently represent nearly $9 billion in market exposure, with a decision on index inclusion expected by January 15 [2] - The proposed MSCI rule changes could exclude companies with digital asset holdings exceeding 50% of total assets, putting Strategy at risk [6][7] Performance Metrics - Following a peak in November last year, Strategy's stock has dropped over 60%, erasing the premium that attracted investors [7] - Despite the recent decline, shares are still up more than 1,300% since Saylor's initial Bitcoin purchases in August 2020, outperforming major equity indices during the same period [8]