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MSCI is mulling over an intriguing new rule that could boot companies from its Global Investable Market Indexes if more than 50% of their assets are tied up in digital currencies like Bitcoin. While this proposal might sound straightforward, it carries some significant consequences. It could impact firms such as Michael Saylor’s Strategy (formerly MicroStrategy), and Eric and Donald Trump Jr.’s American Bitcoin Corp (ABTC), along with many others across the globe whose business models are legitimate, regulated, and align with traditional corporate treasury practices.
The goal of this article is to dive into what MSCI is proposing, explain why concerns surrounding Bitcoin treasury companies might be exaggerated, and highlight why leaving these firms out could actually weaken benchmark neutrality, lower representativeness, and introduce more instability into the indexing system.
MSCI has kicked off a consultation to see if companies whose main activities revolve around Bitcoin or digital asset treasury management should find themselves excluded from its key equity indices if their digital-asset holdings eclipse 50% of total assets. The targeted implementation date? February 2026.
This proposal would encompass a wide range of companies:
- Strategy (formerly MicroStrategy), a leading software and business-intelligence company that holds Bitcoin as part of its treasury reserve.
- American Bitcoin Corp (ABTC), a new public entity created by Eric and Donald Trump with a balance sheet heavily focused on Bitcoin.
- Miners, infrastructure firms, and diversified companies that view Bitcoin as a long-term hedge against inflation or a solid capital reserve.
All of these companies are publicly traded with audited financials, real products, genuine customers, and established governance structures. They aren’t “Bitcoin ETFs.” What sets them apart is a treasury strategy that includes a liquid, globally traded asset.
Recently, analysts from JPMorgan cautioned that Strategy might face up to $2.8 billion in passive outflows if MSCI excludes it from its indices, and could lose up to $8.8 billion if other index providers follow suit.
While their analysis accurately points out the mechanical nature of passive outflows, it overlooks the bigger picture.
This year, Strategy has traded an impressive $1 trillion in volume.
The so-called “catastrophic” $2.8 billion scenario translates to:
- Less than one average trading day
- ~12% of a typical week
- ~3% of a typical month
- 0.26% of year-to-date trading flow
In terms of liquidity, this is negligible. The fear of a liquidity crisis doesn’t align with the actual market structure. The larger concern isn’t the outflow itself—it’s the dangerous precedent that could be set by excluding certain companies from indices based solely on their treasury assets.
If benchmark providers start removing companies due to their treasury asset compositions, then the definition of what makes a company “eligible” becomes biased.
MSCI’s stance also seems at odds with its own asset makeup.
MSCI lists about $5.3B in total assets.
Interestingly, over 70%—around $3.7B—is tied up in goodwill and intangible assets. These items are non-liquid and can’t be sold easily. They aren’t as verifiable as digital assets.
In contrast, Bitcoin:
- Trades globally around the clock
- Features clear price discovery
- Is fully auditable and can be marked to market
- Is arguably more liquid than most corporate treasury assets outside of government cash
The proposal would penalize companies for holding an asset that is much more liquid, transparent, and objectively priced than the intangibles dominating MSCI’s own balance sheet.
As a global leader in setting industry standards, MSCI’s benchmarks guide trillions of dollars in capital decisions. These indices adhere to widely accepted principles—neutrality, representativeness, and stability. Yet, the proposed digital asset threshold contradicts all three.
Neutrality
Benchmarks must avoid arbitrary biases among legal business strategies.
No one would think to penalize companies for holding:
- Large cash reserves
- Gold holdings
- Foreign currency reserves
- Commodities
- Real estate holdings
- Receivables over 50% of assets
Digital assets are the sole treasury asset being singled out for exclusion. Bitcoin is legal, regulated, and widely embraced by institutions globally.
Representativeness
Indices should reflect true investable markets—not selectively curate them.
Bitcoin treasury strategies are rapidly being adopted by companies of all sizes as a long-lasting capital-preservation tactic. Excluding these companies skews the accuracy and completeness of MSCI’s indices, leaving investors with a distorted understanding of the corporate landscape.
Stability
The 50% threshold creates a risky cliff effect.
Bitcoin can swing 10–20% during regular trading sessions. A company could suddenly find itself in a precarious position over fluctuations that really have nothing to do with its core operations.
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Year after year, index eligibility swings in and out because of price changes, leading to:
- Unneeded turnover
- Extra tracking error
- Increased costs for fund management
To keep things stable, index providers usually steer clear of rules that could stir up volatility. But this proposed rule would do just that.
Forced Selling
If MSCI moves forward, passive index funds will have to sell their shares in the companies impacted.
However, the actual impact might not be as significant because:
- Strategy and ABTC are quite liquid
- The funds traded represent a tiny slice of overall trading activity
- Active managers can still choose to hold or buy more
Access to Capital
Some analysts worry that exclusion might hint at risk. But markets tend to adjust quickly.
As long as a company is:
- Liquid
- Transparent
- Capable of raising capital
- Able to explain its treasury strategy
It stays investable. Index exclusion is a hassle, but not a deal-breaker.
Precedent Risk
If MSCI adopts exclusion rules based on asset categories, it might lead to removing companies for their savings choices, rather than their core business performance.
This could dangerously politicize global benchmarks.
Bitcoin treasury strategies are making waves worldwide:
- Japan (Metaplanet)
- Germany (Aifinyo)
- Europe (Capital B)
- Latin America (various mining and infrastructure firms)
- North America (Strategy, ABTC, miners, and energy-Bitcoin blends)
If MSCI disproportionately excludes these companies, U.S. and Western firms might find themselves at a competitive disadvantage compared to regions that welcome digital assets.
Indexes are designed to mirror markets—not to favor certain players over others.
MSCI’s recent decisions regarding Metaplanet’s public offering show it’s aware of the risks related to “reverse turnover.” To prevent index disruptions, MSCI wisely opted not to act on the event during the offering.
This clearly highlights an important reality: strict rules can shake up indices.
A digital-asset threshold could create similar vulnerabilities, but on a much larger scale.
MSCI can maintain transparency and clarity without excluding legitimate operating companies.
A. Enhanced Disclosure
Mandate standardized reporting of digital-asset holdings in public disclosures.
This gives investors better insight without changing the index makeup.
B. Classification or Sub-Sector Label
Introduce a category like “Digital Asset Treasury–Integrated” to help investors differentiate among business models.
C. Liquidity or Governance Screens
If concerns lie in liquidity, governance, or volatility, MSCI can apply criteria that are already used consistently across different sectors.
None of these options require exclusion.
The current proposal misses the mark on tackling real issues.
Instead, it creates several:
- Lowers the representativeness of global indices
- Disregards neutrality by targeting a specific treasury asset
- Increases turnover for passive funds
- Undermines global competitiveness
- Sets a dangerous precedent for non-neutral index construction
Bitcoin is money. Companies shouldn’t be penalized for saving or for selecting a long-term treasury asset that’s more liquid, transparent, and objectively priced than many corporate intangibles.
Indexes should reflect the real markets as they are—not as gatekeepers would prefer them to be.
MSCI needs to pull back this proposal and sustain the neutrality that has made its benchmarks reliable across global capital markets.
Disclaimer: This content was created on behalf of Bitcoin For Corporations just for informational purposes. It shares the author’s insights and opinions and isn’t intended as investment advice. Nothing in this article is an offer, invitation, or solicitation to buy, sell, or subscribe for any security or financial product.
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