In a significant decision impacting Bitcoin-focused corporations and the digital asset landscape, MSCI, a leading global index provider, has wrapped up its review of digital asset treasury companies (DATCOs) without opting to exclude them from its key indices. This means that firms already incorporated into MSCI indexes can maintain their status, provided they meet the existing eligibility criteria.
MSCI took note of concerns raised by institutional investors, who pointed out that certain DATCOs could be perceived as resembling investment funds, a category generally excluded from the provider’s indexes. The indexing authority recognized the challenge in differentiating between investment-oriented entities and operational companies that include digital assets as a central component of their businesses. Consequently, MSCI has announced intentions to initiate a broader consultation regarding the categorization of non-operating companies, while postponing any exclusions or size-related updates for DATCOs.
The announcement reverses earlier apprehensions within financial and cryptocurrency markets about the potential removal of firms, such as Strategy, which predominantly hold Bitcoin and other digital assets. A proposal introduced by MSCI last year suggested classifying DATCOs—defined as public companies with over 50% of their assets in digital tokens—as fund-like entities, thus disqualifying them from core indices. This idea met with intense backlash from stakeholders in the industry.
Strategy, recognized as the largest publicly traded Bitcoin treasury company, was at the forefront of opposition, formally urging MSCI to withdraw the proposal. The company articulated that excluding organizations based solely on asset composition could undermine index neutrality and stability. In an open letter directed to the MSCI Equity Index Committee, Strategy emphasized that DATCOs operate actively rather than exist as passive investment vehicles, arguing for a more nuanced evaluation beyond balance sheet Bitcoin holdings. Advocacy groups such as Bitcoin For Corporations also joined the fray, describing the potential exclusion as discriminatory and cautioning that it could lead to significant passive outflows and market disruptions.
Analysts had forecasted up to $2.8 billion in capital flight from Strategy alone should MSCI implement the exclusion, with broader estimates suggesting severe selloffs across various crypto treasuries.
The recent decision alleviates this uncertainty, ensuring the continued inclusion of DATCOs within MSCI’s index framework and mitigating the risk of index-related passive selling that has been viewed as a looming structural threat to the market. The immediate market reaction was positive, with shares of major digital asset firms like Strategy experiencing noticeable upward movement. For instance, following the news, shares of MSTR surged over 7% in after-hours trading, signaling relief among investors and stakeholders.
