TLDR
- Strategy pushes back on MSCI’s plan to bar companies with 50%+ crypto holdings from major stock indexes
- The firm warns different accounting standards (IFRS vs GAAP) would create inconsistent index treatment
- JPMorgan forecasts $2.8 billion to $8.8 billion in potential passive fund outflows if Strategy gets excluded
- Strategy holds 660,624 BTC valued at approximately $61 billion on its balance sheet
- MSCI will announce its final decision by January 15 before February’s index rebalancing
Strategy launched a direct challenge against MSCI’s proposed policy change this week. The index provider wants to exclude companies holding more than 50% of their assets in crypto from global equity benchmarks.
MicroStrategy Incorporated, MSTR
The company sent a detailed 12-page response to MSCI’s Equity Index Committee on Wednesday. Strategy argued the rule would create unstable conditions for both index providers and investors.
MSCI began reviewing digital asset treasury companies in October. The review questions whether firms like Strategy belong in its Global Investable Market Indexes. Any exclusion would primarily affect Strategy, which holds 660,624 BTC worth roughly $61 billion.
The index provider claims bitcoin treasury firms function more like investment funds than operating businesses. Strategy disputes this characterization entirely.
Accounting Rules Create Inconsistency Problem
Strategy identified a major flaw in the 50% threshold approach. Companies using IFRS accounting can keep bitcoin at historical cost. U.S. firms following GAAP must adjust bitcoin holdings to current market prices each quarter.
Two companies with identical bitcoin exposure could face different treatment based solely on reporting jurisdiction. This creates a situation where firms would constantly move in and out of indexes as bitcoin prices fluctuate.
The company described this as potential “whiplash” that would generate “chaos and confusion” for everyone involved.
Strategy also questioned MSCI’s selective approach to single-asset companies. Real estate investment trusts remain in indexes despite focusing primarily on property holdings. Oil companies concentrate on petroleum. Financial institutions package specific assets into mortgage-backed securities.
The letter stated these businesses stay in MSCI indexes without controversy. Strategy asked why bitcoin treasury firms deserve different treatment.
U.S. Policy and Market Impact
Strategy connected the proposal to broader U.S. government initiatives. The Trump administration launched several programs supporting digital asset growth. These include the Strategic Bitcoin Reserve and expanded retirement account access to crypto.
The company argued MSCI’s exclusion would contradict these pro-innovation policies. Bitcoin treasury firms would lose access to approximately $15 trillion in passive investment capital if removed from major indexes.
JPMorgan analysts calculated the financial impact last month. They estimate Strategy faces around $2.8 billion in passive outflows if excluded. The number jumps to $8.8 billion if other index providers adopt similar rules.
Strategy stock dropped more than 50% over the past year. Bitcoin fell 15% from early 2025 prices above $109,000 to current levels near $90,000.
Industry Pushback Grows
Other bitcoin treasury companies joined the opposition. Strive submitted feedback last week calling the 50% threshold “unworkable.” The firm suggested MSCI could create optional index versions excluding digital asset treasury companies for clients preferring that approach.
MSCI raised concerns about volatility and correlation risks. Federal Reserve research shows bitcoin and Ether demonstrate much higher price swings than stock indexes, gold, or oil. The Fed noted leverage use among crypto traders amplifies these volatility patterns.
MSCI will announce its final decision by January 15, 2025. Any policy changes take effect during February’s index rebalancing.
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