MSCI Reverses Course, Keeps Bitcoin Treasury Companies in Global Indexes

Index Provider Halts Proposed Exclusion

MSCI Inc. has concluded its review of digital asset treasury companies (DATCOs) and determined not to exclude them from its global equity indexes, reversing market expectations that had weighed on Bitcoin-focused corporations for months ^[1][2].

The index provider confirmed that companies already included in MSCI indexes will remain as long as they continue meeting existing eligibility requirements ^[2]. The decision means firms like Strategy will maintain their positions in major benchmarks including the MSCI World, MSCI ACWI, and MSCI USA ^[1].

Background of the Controversy

MSCI first announced on October 10 that it was examining whether publicly traded companies with more than 50% of their balance sheets composed of cryptocurrencies should be removed from its indexes ^[1]. The proposal would have effectively classified these firms as fund-like entities rather than operating companies, making them ineligible for inclusion in core indices ^[2].

The announcement triggered significant concern in financial markets. A research note from JPMorgan brought particular attention to the issue by calculating potential selling pressure on Strategy's stock if the exclusion proceeded ^[1]. Analysts had projected potential capital flight of up to $2.8 billion from Strategy alone, with broader estimates of forced selloffs across crypto treasuries ranging much higher ^[2].

Industry Pushback

Strategy, the largest publicly traded Bitcoin treasury company, mounted a vigorous defense against the proposal. The company submitted an open letter to the MSCI Equity Index Committee, arguing that DATCOs are operating companies rather than passive funds and should not be judged solely on their Bitcoin holdings ^[2]. Strategy characterized the proposal as "misguided," "arbitrary," and warned it could destabilize index neutrality ^[2].

The company also noted that the exclusion would conflict with the vision of the crypto-friendly Trump administration ^[1]. Matt Cole, CEO of Strategy competitor Strive, similarly submitted written objections to the index provider ^[1].

Industry coalitions such as Bitcoin For Corporations mobilized support, describing the move as discriminatory and warning of broader market dislocations ^[2].

MSCI's Rationale

In its announcement, MSCI acknowledged receiving feedback from institutional investors expressing concern that some digital asset treasury companies resemble investment funds, which are typically excluded from its indexes ^[2]. However, the index provider stated that distinguishing between investment-oriented entities and operating companies that hold digital assets as part of their core business requires further research and market input ^[2].

MSCI indicated it plans to launch a broader consultation on the treatment of non-operating companies, while deferring any exclusions, additions, or size-related changes for DATCOs in the interim ^[2].

Market Response

The decision surprised markets, as prediction platform Polymarket had shown a 77% probability of Strategy being removed from MSCI indexes by the end of March before the announcement. That probability dropped to just 4% following the news ^[1].

Strategy shares jumped approximately 6% in after-hours trading following the announcement ^[1], with another source reporting gains exceeding 7% ^[2]. However, the stock remained nearly 50% below its October 10 level, having declined more than 30% in Bitcoin terms during the period ^[1].

Strategy's official account on X described the decision as "a strong outcome for neutral indexing and economic reality," thanking investors and the Bitcoin community ^[1].

The company announced on Monday it had purchased 1,287 Bitcoin the previous week through equity issuance, bringing its total holdings to 673,783 BTC valued at approximately $63 billion ^[1]. Bitcoin itself registered modest gains following the announcement ^[1].