MSCI The company is planning to introduce a rule which would exclude companies from the Global Investable Market Indexes if at least 50% of their assets were held in digital currencies such as Bitcoin. Although the proposal is simple, its impact could be far-reaching. Michael Saylor’s company would be affected. Strategy Eric Trump Jr. and Donald Trump Jr.’s (formerly MicroStrategy) American Bitcoin Corp (ABTC), as well as dozens of other business models across international markets, whose model are completely legitimate, fully regulated, aligned and in line with corporate treasury best practices.
The purpose of this document is to explain what MSCI is proposing, why the concerns raised around Bitcoin treasury companies are overstated, and why excluding these firms would undermine benchmark neutrality, reduce representativeness, and introduce more instability—not less—into the indexing system.
MSCI has launched a consultative process to decide whether or not companies that are primarily involved in Bitcoin or digital asset treasury-management should be excluded from their flagship equity indexes, if the digital assets they hold exceeds 50% of all assets. The proposed implementation is set for February 2026.
This proposal will affect a wide range of businesses:
- Strategy (formerly MicroStrategy), a major software and business-intelligence firm that holds Bitcoin as a treasury reserve.
- American Bitcoin Corp. (ABTC), a newly created public company by Eric and Donald Trump, with a Bitcoin focused balance sheet.
- Bitcoin is used by miners, infrastructure companies, and diverse operating firms as an inflation hedge, or capital reserve, over the long term.
All of these companies are publicly-traded operating entities, with real financials and audited accounts, as well as real products, customers, and governance. These companies are not “Bitcoin ETFs.” They only differ in that they have a global treasury plan with a liquid and traded asset.
JPMorgan analysts have warned Strategy that it could be hit by passive outflows up to $2,8 billion dollars if MSCI decides to remove the stock from its indexes. This figure can rise to up to $8.8 billion if others follow suit.
The analysis accurately identifies passive flow as mechanical. It misses out on the context.
More than anything else, strategy is more valuable. 1 Trillion US Dollars In volume, this year.
You can also find out more about the following: “catastrophic” $2.8B scenario represents:
- Trading days less than the average
- The average week is 12%
- 3% of an average month
- 0.26% The year-todate trading flows
It is not important in the context of liquidity. This narrative does not reflect the reality of market structure. The larger issue is not the outflow itself—it is the precedent that index exclusion would set.
When benchmark providers remove companies due to the nature of their assets in treasury, they will have to redefine what constitutes an entity. “eligible company” It is time to get political and not just financial.
MSCI’s position on policy is also in conflict with MSCI’s composition of assets.
MSCI Reports about $5.3B Total assets
There’s More Than You Think 70%—about $3.7B—is goodwill and intangible assets. These accounting entries are non-liquid and non-marketable, which means they can’t be bought or marked-to-market. The digital assets cannot be verified in the same manner.
Bitcoins as an alternative:
- Global 24/7 Trades
- Has transparent price discovery
- Does it fully audit and mark-to market?
- The most liquid corporate Treasury asset is sovereign cash
Companies would be penalized for owning assets that are not eligible. The market is more transparent and liquid. MSCI balance sheet is dominated by intangibles.
MSCI has set global standards. The benchmarks it provides are the basis for capital allocations worth trillions of dollar. These indices are governed by widely accepted principles—neutrality, representativeness, and stability. The proposed threshold for digital assets contradicts each of these principles.
Neutrality
It is important that benchmarks do not discriminate arbitrary between lawful strategies.
The removal of companies for having:
- Cash Positions
- Gold reserves
- Foreign exchange reserves
- Commodities
- Real estate
- Receivables exceeding 50% of Assets
Digital assets were the sole Treasury Assets excluded. Bitcoin is a legal and regulated currency that’s widely used by many institutions around the world.
Representativeness
Indices are meant to reflect investable markets—not curate them.
Bitcoin treasury Corporations of all sizes are increasingly using long-term strategies to preserve their capital. The MSCI indices are less complete and accurate when these companies are removed, which gives an investor a false impression of the company landscape.
Stability
A binary cliff is created by the 50% threshold.
Bitcoin routinely moves 10–20% in normal trading. Price action could cause a company to fall into and out of eligibility for the index multiple times per year.
- Turnovers that are not necessary
- Additional tracking error
- Costs of fund implementation
Typically, index providers do not use rules that increase volatility. This rule introduces it.
Forced Sales
Passive index funds will need to be re-indexed if MSCI continues. sell holdings Companies affected by the disaster are available for purchase.
But the impact on real life is only marginal.
- ABTC and Strategy are both highly liquid
- The flow represents a small fraction of the normal volume
- Managers can continue to hold or increase exposure.
Capital Funding
Experts warn against exclusion “signal” risk. But markets adapt quickly.
If a business is in existence:
- Liquid
- Transparent
- Capable of raising capital
- Ability to communicate Treasury Policy
You can still invest in it. Index exclusion is an inconvenience—not a structural impairment.
Precedent Risk
MSCI can embed asset-based inclusion rules to remove companies that are based solely on the savings they make, rather than their core business.
It is an attempt to politicize global benchmarks.
The use of Bitcoin as a treasury strategy is expanding globally:
- Japan (Metaplanet).
- Germany
- Europe (Capital B)
- Latin America (multiple mining firms and infrastructure companies)
- North America (Strategy and ABTC for miners as well as energy-Bitcoin Hybrids).
MSCI’s exclusions of digitally-capitalized companies will place U.S., and Western companies at a disadvantage in comparison to countries that have embraced this technology.
Indexes are meant to reflect markets—not pick national winners and losers.
MSCI has shown that it is aware of the risks associated with Metaplanet’s recent public offering. “reverse turnover.” MSCI selected a diversified index to reduce the risk of index volatility It is not clear how to get there. The event must be implemented at the moment of the offer.
The fact that this is acknowledged highlights an important truth: strict rules can lead to index destabilization.
Digital-assets thresholds create similar fragility at a large scale.
MSCI is able to achieve analytical transparency without exclusion of lawful operating companies.
A. A.
Reporting digital asset holdings must be standardized in all public filings.
The index is reorganized to provide investors with more clarity, without altering the composition.
B. B.
Add a new category, such as “Digital Asset Treasury–Integrated” Help investors to differentiate business models
C. Liquidity Screens or Governance Screens
MSCI must use criteria that it applies to all sectors if there are concerns over liquidity, governance or volatility.
None require exclusion.
The proposal is not a solution to a problem.
There are several types of:
- Reduction in the representativeness of global indexes
- By discriminating against one specific asset in the Treasury, a violation of neutrality has occurred.
- Introduces volatility through a binary level tied to an investment with normal volatility
- Increases the turnover of passive investments
- Damages global competitiveness
- Creates a precedent in index construction that is politicized
Bitcoin is money Companies should not be penalized for saving money—or for choosing a long-term treasury asset This is a more liquid and transparent intangible asset than many corporate assets.
Indexes must reflect markets as they are—not as gatekeepers prefer them to be.
MSCI must withdraw its proposal and continue to maintain neutrality, which has allowed it to be trusted by global capital markets.
Disclaimer: Written by: This article is written for the benefit of Bitcoin For Corporations. This article has been written solely to inform and is not intended as an invitation, solicitation or offer to buy or subscribe securities.
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Source: bitcoinmagazine.com
