Shares of Strategy experienced a notable surge of up to 7% earlier today, following a significant announcement from MSCI, a global index provider. After a prolonged review of digital asset treasury companies, MSCI decided not to exclude these firms from its flagship equity indexes, at least for the time being. In early market trading, shares of Strategy (trading under the ticker symbol $MSTR) spiked above $170, although gains were later pared as bitcoin retreated to the low $91,000 range.
By midday, $MSTR shares settled around $165, reflecting a 4% increase, but the stock movement mirrored the general downturn in the broader cryptocurrency market. The recent rally was underpinned by MSCI’s confirmation to maintain the current classification of digital asset treasury companies (DATCOs) within its indexes. This decision assures that companies included in MSCI indexes can remain listed as long as they meet existing requirements, alleviating months of speculation and uncertainty that hung over Strategy’s stock.
The backdrop of MSCI’s review had raised concerns about the potential reclassification of firms predominantly holding digital assets, such as bitcoin, into the category of “investment-oriented” entities. Such a change might have rendered these companies ineligible for inclusion in widely followed benchmarks like the MSCI All Country World Index and MSCI Emerging Markets Index. The proposal ignited considerable pushback from both Strategy and the broader bitcoin community, who argued that excluding companies based solely on their balance sheet composition was arbitrary and detrimental to the principle of index neutrality.
Industry representatives warned that the exclusion of DATCOs could lead to billions of dollars in passive outflows, which would likely destabilize both equity and cryptocurrency markets. Analysts estimated that Strategy alone might have faced potential forced selling of up to $2.8 billion had MSCI moved forward with its exclusion plan, raising concerns of an even larger sell-off across other bitcoin treasury firms. The recent decision from MSCI effectively mitigated this immediate risk, prompting buying interest in $MSTR as the threat of index removal receded.
However, MSCI’s outcome was not entirely free from caveats. The index provider acknowledged to institutional investors that some digital asset-heavy companies might resemble investment funds and indicated a need for further research to distinguish between operating companies and investment-oriented entities. As part of its interim strategy, MSCI stated it would not adjust index weightings to account for new share issuances by DATCOs, which could limit Strategy’s capacity to expand its index presence through equity crowdfunding to acquire more bitcoin. Moreover, MSCI indicated that exclusion remains a future possibility, suggesting its indices are tailored to track operating companies, with a broader consultation on non-operating firms anticipated.
For now, the markets are reacting positively to the interim decision. Strategy continues to hold nearly $63 billion worth of bitcoin, solidifying its position as the largest publicly traded corporate holder of the cryptocurrency. As of the latest update, bitcoin was trading in the low $91,000 range, while the aftermath of MSCI’s decision unfolds in the markets.
