What has been happening this week in the world of blockchain and cryptocurrencies? Here are the key current events and background reports from our weekly review.

MSCI removes Strategy from global equity indices

Index provider MSCI is removing Bitcoin treasury company Strategy from its global equity indices in late November, including the benchmark MSCI World Index — a change that obliges funds tracking these indices to sell the stock. Because index funds mirror the composition of the benchmarks they track, such a deletion translates directly into selling by passive vehicles. The removal is based on a new rule covering companies whose assets are not primarily operating assets. Although the rule does not explicitly name Bitcoin, an MSCI simulation flagged Strategy for deletion as early as August.

Strategy continues to accumulate Bitcoin and currently holds 850,364 BTC, funding the purchases with newly issued shares. By Strategy's own estimate, index funds hold around 13 million of its shares, corresponding to roughly 3.1% of shares outstanding and less than one day's trading volume — figures that size the selling pressure the removal creates. A year ago, bank JPMorgan estimated potential outflows of USD 2.8 billion, although that figure referred to the original proposal.

The deletion does not force Strategy to sell any of its Bitcoin. Nevertheless, the exclusion could make it harder for the company to finance further purchases — a channel that matters for a company funding its Bitcoin buying with newly issued shares. Strategy disputes the classification, arguing that it reports its Bitcoin business as an operating segment. How much of the estimated index-fund stake actually changes hands after the late-November deletion will be one gauge of the change's practical impact.

Banks fund a rival to Tether and Circle

Goldman Sachs, Citigroup and other financial firms have pledged around USD 270 million to a joint stablecoin, Bloomberg reports, citing insiders. A stablecoin is a token designed to track the value of a currency such as the US dollar, with reserves backing the peg. To date, the market — worth around USD 295 billion — has been dominated by crypto firms Tether and Circle, which together account for nearly 84% of it. An issuer backed by global banks would thus mark a notable shift in a market that crypto-native firms have led so far.

The pledged funds are intended to cover five years of operations at a US issuer that has yet to be founded. The venture plans to issue a dollar token in the first half of 2027 under the GENIUS Act, the US stablecoin law. The group of 21 financial institutions includes Switzerland's UBS and, according to reports, asset manager Fidelity. Key points remain open, however: the project has neither a chief executive nor a final name, and it is unclear how the sum will be broken down and whether all members will pay in. How these open points are settled will be worth watching as the planned launch in the first half of 2027 approaches.

Bitcoin slides and the Clarity Act expires

Bitcoin fell to USD 73,708 after the US midterm elections, its lowest level since August. Ether lost around 5% and briefly slipped below USD 2,100. At the same time, exchanges forcibly closed leveraged bets worth more than USD 1 billion. It is not possible to say with certainty what triggered the decline. Reuters points mainly to concern about stricter regulation under the incoming Democratic Congress. By contrast, CoinDesk cites an investigation involving Nvidia CEO Jensen Huang and failed Iran talks as the triggers.

Elizabeth Warren is the frontrunner to chair the Senate Banking Committee, a post from which she could set the agenda. Senate legislation, however, still requires 60 votes, meaning the Democrats will not have a free hand. Moreover, the Clarity Act — the proposed bill for supervising the crypto market — lapses in January with the outgoing Congress. As a result, the new Congress would have to start the legislative process from scratch, and how the Senate Banking Committee chairmanship is decided will be an early indicator of the legislative direction.

Trump Media earns mostly on paper

Trump Media, the company behind the social network Truth Social, posted a third-quarter profit of USD 409.7 million, after reporting a loss of USD 54.8 million in the prior-year quarter. Valuation gains of USD 496.1 million on crypto holdings and stocks tipped the balance but brought in no cash — gains of this kind exist only on paper until the underlying assets are sold. At the end of September, Trump Media held around 15,649 BTC, so its results swing with the Bitcoin price.

The core business remains small, with revenue of just USD 3 million. Excluding the valuation gains, the quarter would consequently have shown a loss of around USD 86 million, and the loss over nine months totals roughly USD 234 million. Crypto holdings make up more than half of total assets, meaning that if the Bitcoin price falls, the same items would turn into losses. With revenue this small, reported results therefore hinge on market valuations rather than on operations. The stock market reaction was muted, and the shares have lost almost 70% since January.

Bitcoin Core discloses vulnerabilities after support ends

In addition, Bitcoin Core, the Bitcoin network's reference software, disclosed three security vulnerabilities this week. Network computers, known as nodes, use the software to check and relay transactions and blocks. The project had already fixed the flaws around a year ago. It rates the most serious as “high,” the second-highest of four severity levels. This flaw could have stopped miners from preparing valid new blocks if the network had first replaced the latest blocks. It did not, however, affect consensus, the network's shared rule set.

As a rule, the project fixes flaws quietly and describes them publicly only when support for the affected versions ends, giving operators time to update. By the time of public disclosure, the fixes had thus long been available, and moving to a supported release is how operators of outdated nodes address the disclosed flaws. Support for the last affected release series ended in late October; anyone still running these or older versions is therefore using unsupported software. The advisories do not say whether anyone ever exploited the flaws.

Source: Crypto Valley Journal