Global index provider MSCI recently completed its assessment of digital treasury company (DATCOs). decided against They are excluded from their flagship indexes.
MSCI has said that the treatment of DATCOs in MSCI Indexes for now will not change. This means they will continue to be included so long as they meet their existing eligibility criteria.
Index provider acknowledges feedback from institutional investor expressing concerns that digital asset treasury firms resemble investment fund, which is typically excluded from their indexes.
MSCI also said that further market research is needed to distinguish between companies with digital assets in their business core and those who are investment-oriented.
According to an announcement by the company, MSCI plans to conduct a wider consultation regarding the treatment of DATCOs. However, it will defer any changes to DATCOs’ size, exclusions or additions.
The move reverses fears that have swirled in financial and crypto markets for months that firms — like Strategy — holding a majority of their assets Bitcoin and digital assets could be stripped From widely followed global equity benchmarks such as the MSCI All Country World Index and Emerging Markets Index.
The proposal, first announced by MSCI late last year, would have effectively classified DATCOs — public companies with greater than 50 % of assets in digital assets — as fund-like entities rather than operating companiesAnd so, Ineligible to be included The core indicators are the most important.
This framework was on fire criticism Industry players and activists.
MSCI is facing a backlash from the Bitcoin industry and its strategy
Strategy — the largest publicly traded Bitcoin treasury company — and other DATCOs had been at the center of the debate.
Strategy officially urged MSCI not to proceed with the proposal. arguing It would not be fair to exclude companies based only on the asset composition. “misguided,” “arbitrary,” This could lead to index neutrality being undermined.
Strategy stressed in an open letter sent to the MSCI Equity Index Committee that DATCOs should be included. operating companiesBitcoins are not passive investments and shouldn’t be judged based solely on their balance sheet.
Bitcoin For Corporations and other industry coalitions also mobilized supportThe move was characterized as discriminatory, and the exclusion of certain groups could lead to billions worth of passive flows and wider market disruptions.
Analysts projected the potential capital flight of up to $2.8 billion The forced sales of crypto bonds could be as high as $600 billion if MSCI follows through.
This decision puts an end to the uncertainty. This decision maintains DATCOs as part of MSCI’s suite indexes. It also avoids trigger index-linked selling, which was a major structural market risk.
Shares of digital assets heavyweights, including Strategy, saw an immediate response from investors.
MSTR shares soared over 7% in the after-hours trading following this news.
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Source: bitcoinmagazine.com
