Under the leadership of Michael Saylor, Strategy has filed an official letter to challenge MSCI’s proposal: excluding companies whose digital assets exceed 50% of the balance sheet total from major stock indices. A rule that would directly target Strategy (MSTR), already shaken by the drop in Bitcoin and the contraction of its mNAV, the premium that investors attribute to its BTC exposure.
On Wall Street, the announcement of the project had triggered a new drop in the stock, as markets anticipated a possible MSCI index expulsion and the evaporation of billions in passive flows along with it.
MSCI Wants to Exclude Companies Heavily Exposed to Digital Assets
MSCI’s consultation proposes a red line: as soon as a company holds 50% or more of its assets in crypto, it would become ineligible for the MSCI Global Investable Market Indexes. The official goal would be to preserve the ‘equity’ nature of benchmarks by excluding companies deemed too close to an investment vehicle.
For Strategy, this interpretation falls short. The company asserts that DATs, digital asset treasury companies, are not funds but operational entities. In its case, Saylor emphasizes that Strategy runs a global software business, develops credit products linked to Bitcoin, and manages an active treasury program. Investors are not buying an empty shell correlated to BTC, but a strategic vision and a leadership team.
A Methodological Critique: The 50% Threshold Deemed Arbitrary
Strategy lists five reasons explaining why it is not a fund: a classic corporate structure, no ETP mechanism, no classification as an investment company, no fund-type taxation, and a long history as a software operator. According to them, the 50% threshold is not only arbitrary but also impractical.
The company points out that many listed companies hold concentrated reserves in oil, real estate, lumber, or utilities without MSCI seeing an issue. Treating companies exposed to digital assets differently would mean imposing an ad hoc rule, without clear operational justification.
A Risk to American Innovation and Competitiveness
Strategy believes that the proposal introduces a form of political stance in index construction, even as US federal policy leans towards increased support for crypto innovation. Excluding DATs could lead to massive outflows of passive capital, penalize pioneering American companies in using Bitcoin as productive capital, and slow the growth of new financial technologies.
If MSCI persists in this direction, Strategy urges the index provider to extend the consultation and precisely explain the motivations behind a reform deemed discriminatory. The showdown is set to be crucial for the future placement of Bitcoin-oriented companies in major global indices.
