What impact could the MSCI decision on crypto asset classifications in January 2026 have on institutional Bitcoin involvement?
Why is this the correct answer?
An MSCI reclassification can change how index providers treat Bitcoin within benchmark calculations. If Bitcoin is elevated to higher status, portfolio managers tracking these indices may increase allocations to match the new benchmarks. This shift can drive additional institutional purchases, boosting demand and liquidity. For beginners, imagine a teacher updating a study guide and students adjusting their reading lists to include the newly important subject. Similarly, institutions adjust portfolios in response to the updated classification.
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