Transcription
On the 10th of October, crypto experienced the biggest crypto liquidation and collapse of all time. And at the time, people thought that this collapse happened randomly and that the effects of the collapse were that the market makers and everyone just lost their liquidity and that's what caused the damage.
However, since the 10th of October, what you realize is that crypto hasn't even been able to get one meaningful bounce. And again, people are speculating that it's a coincidence and they're blaming it on things like Japan or the AI bubble. But let me tell you that what's going on in this market is not a coincidence. And it's linked to one of the biggest risks we experienced or we or we have in crypto. And that is Micro Strategy. It's a serious risk and what's happening now is that it's playing out in real time just before our eyes.
I don't usually do live shows and or urgent shows on this channel, but today I had to come to you with a very very very urgent shows because what's happening with crypto, what's happening with Micro Strategy, what started on the 10th of October is a pretty serious risk and if it materializes, it could mean that there's a lot more downside in crypto. So, here I am bringing you a unscheduled show on our channel to break down exactly what's going on. And I'm going to do try and do it as fast and as concise as possible. It's going to be a massive show and you need to share the show and if you and you need to like like and subscribe please to help us get distribution because we need to get this message out there so we can protect our fellow crypto users. All right, without further ado, let's get this show on the road.
As I said, I don't usually do live or urgent shows on this channel, but this is an exception. And the reason why it's an exception is because we thought that the 10th of October was a coincidence. And we thought that the markets were going down because of the potential AI bubble bursting or because of what was happening in Japan. But that's not what's going on around here. And specifically, if you look at what's going on around here, it's all related to Micro Strategy. And when did it start? Well, it started exactly on the 10th of October. But the mainstream media never picked it up. And the truth is that we never picked it up on the 10th of October. But we're picking it up now and I'm going to bring it to you uh right here right now and I'm going to break down for you exactly exactly exactly what it means.
Again, if you're not already subscribed to the channel, this is our new channel. Uh it's called Crypto Insider. Subscribe to the channel and if you are subscribed, hit the like button because it really helps me get distribution of these unscheduled things and I've been working really hard through the night to actually dig up and bring you guys uh the amazing alpha of what I've what I found.
So, let's recap exactly what happened. On the 10th of October, we had the biggest crypto liquidation of all time. You remember it. Over 20 billion dollars was liquidated. Over $1.6 million traders were liquidated just in the first 24 hours. And it didn't end there because straight after that, what we saw is we saw something very unusual. We saw Bitcoin collapsing without even one single meaningful bounce. Now, a lot of people blamed this on the end of the cycle, and indeed, it could be the end of the cycle, but I think we need to dig into the reason of why crypto actually crashed on the 10th of October and why it hasn't got a meaningful bounce since then. And the truth is that if you want the answer to that, the answer to that doesn't lie in the Bitcoin chart. It lies in the Micro Strategy chart. And if you look at the Micro Strategy chart, the performance of Micro Strategy has been absolutely appalling. Since the 16th of July, Micro Strategy is down 61%. And if you look at Micro Strategy since the 10th of October, you'll notice that Micro Strategy is down uh about, let me get you the exact numbers over here. So, it's down about 50% since the 10th of October.
So, what happened? What happened on the 10th of October? Why did Bitcoin collapse and why did Micro Strategy collapse on the 10th of October? Well, the answer is pretty simple and it relates to this announcement over here. The announcement was published by a company called the MSCI. And what they said is that the MSCI is consulting on how to treat companies whose primary business model involves Bitcoin or other digital asset activities, including cases where capital raising activities are used to mainly accumulate digital assets.
Now, who is MSCI and what does this announcement actually mean? MSCI is one of the biggest index providers in the world. So, you know, when you invest in an index of stocks like the S&P or the NASDAQ, well, MSCI is exactly the same. In fact, MSCI is one of the top three index companies around the world. They create passive indices that usually funds invest in and their assets under management is about $18.3 trillion. They one of the three big index providers around the world. The other two the other ones are S&P Dow Jones and Footsie Russell. And as I said before, they are about the same size as the S&P. They had $1.6 billion in revenue. And the S&P also has about $1.6 billion in revenue. So, the MSCI is one of the three biggest index providers, but the bigger deal is that they're always seen as the mavericks, the ones that move pretty quickly and usually the other indices follow.
So, what is this announcement actually about? Let's break down what the announcement actually about. MSCI proposes to exclude from its global investable market indices companies whose digital asset holdings are more than 50% of their total assets. So, what does that mean? Right now today the that model and specifically Micro Strategies model is to buy Bitcoin and to use various ways to raise money to to accumulate Bitcoin and to be included in many indices as many indices as possible. And one of the ideas that one of the things around Micro Strategy is that they are they were hoping to get included in the S&P 500.
Why is it such a big deal to be excluded or included in indices? Because the majority of the investment funds or the majority of the investment vehicles basically just follow indices. So you get an S&P 500 index tracking fund, you get a Russell 2000 index tracking fund, you get a NASDAQ 100 index tracking fund. And what that means is that anybody who wants to track the index basically buys all the shares in that index or all the equities in that index and it buys them in the proportion that they are to the index. And it's become one of the biggest investable markets in the world. In the old days, what you do is you'd pay a fund manager. You'd pay them 2% every year and you'd pay them 20% of the upside. But since then, the world has changed and people have realized that they can make more money just following an index. And how do you follow an index? Well, you just invest in an index tracking fund. And what the index tracking fund does is it just buys the exact same amount of that asset every time you put money into it as that asset represents in the total fund.
Now the one thing about indices is that even if a company is big enough or has all the criteria to meet the index but that company in itself is deemed to be a fund then it's usually excluded from the passive investable index tracking funds. And the reason is pretty simple because what you then get is you'd get a fund investing in a fund which is basically investing in itself. And so what the MSCI are talking about doing they want to exclude from its global investable market indices companies whose digital asset holdings are more than 50% of their total assets. And that pretty much refers to Micro Strategy but also to some of the biggest digital asset trading companies. Right? That would deem their ruling would deem these um uh uh uh companies as funds and as a result of the fact that they funds they shouldn't be invested in in passive index investments and that's and that announcement was first made well you guessed it on the 10th of October 2025.
So whilst we all thought that the big crash on the 10th of October 2025 was a coincidence, turns out that it wasn't really a coincidence and that what was brewing behind the scenes was a massive announcement by this company called MSCI. And probably the smart money actually saw this before everyone else. And it's been flying under the radar until this morning when it was broken on many of the news headlines including Bloomberg and and a whole lot of others. And what they're saying here is they're saying in a note this week, analysts say that at JP Morgan Chase warned that strategy could lose its place in the likes of the MSCI USA, the NASDAQ 100 as much as $2.8 billion could exit if this MSCI moves ahead. And the worst part is because MSCI is seen as this maverick, usually the other fund providers actually land up following it, right? So that they try and move kind of uniformly. So if one does something and they have real logical rational uh reasoning for doing something then usually the others land up actually following.
So as I said to you before this happened on the 10th of October. They're going to be consulting until the 31st of December and their final conclusions are set to be announced by the 15th of January. And so we we can expect a lot of turbulence and a lot of uncertainty in the market at least until the 15th of January. Now on the 15th of January, one of two things may happen. Either this is real, in which case it will be implemented by February 2026. And on that day, the funds will automatically start dumping because remember the one thing about the funds is that the funds don't have negotiation. Either you're in the fund or you're not. If you're in the fund, you get bought. If you're not in the fund, the algos automatically sell. And so what we can see is that there if this is if if this passes then on the 15th of uh then in February next year when it passes automatically the funds will start unwinding their positions. The market's probably preempting this or will preempt this even more after the 15th of January decision and we can expect a massive dump uh on the 15th of January. If this doesn't happen, then the market will start moving up. But generally, nothing would probably happen until the 15th of January when we actually get some kind of decision.
As I said to you, as I said to you before, or if you want to if you want to look at the actual numbers, MSCI is a massive, massive, massive fund provider, $18.3 trillion in its indices under management. It is one of the top three and it is as big as the S&P and it is bigger than the Footsie Russell uh index and as Chat GPT says MSCI is a very large and one of the most dominant global index providers especially for equity and multi-trillion dollar and multi-t trillion dollar assets.
So um what are the implications specifically for Micro Strategy? Well, the immediate implications are that about 9 billion of its $59 billion market cap sits in passive exchange traded funds. That's massive. That's 25% of its market cap or 20% of its market cap which sits in passive exchange traded funds. And that would be dumped immediately. And remember, when they dump that, the $59 billion market cap will go down to I mean, I can't speculate, but could go down as low as 20 or $30 million. The second thing is that it means that going forward Micro Strategy and all other digital asset treasury companies won't be included in any indices and that's their whole model. Their whole model is to try and be the biggest and if you are the biggest you get the most attention around you and you get included in most the indices and that's what usually drives the price up and the energy up and all the financial instruments and the derivatives and the options around your your your your equity. In this case, if the ruling happens, then that takes out all that energy and that takes out that viability of all the digital asset treasury companies because they're not going to be included in indices anymore. And if they're not included in indices anymore, well, then what's the point? The whole idea was that these passive investors start holding these digital asset treasuries as part of their as part of their investments.
And so now we know what the real reason for the crypto collapse is because I did tweet a long time ago and I said that you know every cycle ends with a big leverage unwind. And a while ago I tweeted and I said mark my words every crypto cycle ends because of a big leverage bubble burst. This cycle the treasury company frenzy is the leverage that will end the cycle. Bookmark this tweet. That was on the 3rd of July. At the time, I obviously didn't know this was happening, but it does now feel like this could have been the lunar moment of the cycle. This is the moment where the biggest buyers of the cycle, which were the digital asset treasury companies and the ETFs, but specifically around the digital asset treasury companies, well, they are now facing a massive cataclysmic risk. If they aren't excluded in any more indices, the their viability goes down a hell of a lot and their ability to raise money goes down a hell of a lot.
So, um, that's pretty much why the market has been going down and why the market has been going down without a bounce. And I wish I could give you good news and say to you, well, this is going to end soon. But I don't think it is because we ain't going to get a decision until the 15th of January at least. If we get a good decision or a favorable decision on the 15th of January, the market starts flying up. If we don't, then there's going to be another massive much much much bigger dump on the 15th of December because on on or sometime in in February because that's when these guys will actually have to automatically algorithmically start dumping all their holdings of the digital asset treasury companies including Micro Strategy.
Now I try to reach out to Sailor but he hasn't obviously I think he's busy with with much bigger other things. Uh the publications also tried to reach out to Micro Strategy and I think for now they've been unavailable unavailable for comment but clearly this is a this is a um a cataclysmic risk for these digital asset treasury companies. The next question that a lot of people have is will Micro Strategy now have to sell their Bitcoin? So the good news is that they won't have to sell their Bitcoin because the model Micro Strategy's model which is >> and my last point to you do not sell your Bitcoin >> buying Bitcoin holding Bitcoin and never selling Bitcoin is micro sellers strategy and just and the fact that the funds will be dumping their shares will hurt the Micro Strategy price probably send it under net asset value but it doesn't mean that Micro Strategy has to sell Bitcoin. All it means is that one of the biggest places and one of the biggest sources of energy for Micro Strategy where it was getting its energy and its investment from will now be terminated.
And so what I think this means is that if this ruling comes in, I think that one of the biggest buyers or one of the biggest cohort of buyers for this cycle, which is the digital asset treasury companies, will basically be chopped up and we won't get digital asset treasury companies as a big buyer anymore. and then we'll be reliant on governments, ETFs, and other buyers. So, it's a massive risk. It's a real risk, and it's probably the real reason why crypto has been going down without even one breath for air uh in a long time. The reason why we got a big liquidation candle today again was because um because today the news broke on Bloomberg. The truth is that we probably all should have picked this up a long time ago because this was the reason why the market started crashing on the 10th of October.
So guys, that's all I've got for you today. If you like this video, give me a thumbs up, share it with your friends, let me know in the comments uh what you think. Uh I'll see you again in the next one, and hopefully I'll have a lot better news for you guys. Until then, trade well, my friends.