Major index provider MSCI is poised to implement sweeping exclusions against companies with substantial cryptocurrency holdings, potentially reshaping the investment landscape for digital asset treasury firms. The New York-based firm will finalize its decision by January 15 regarding whether to remove from its benchmarks companies whose digital assets constitute 50% or more of their total assets.
The proposed methodology change, initiated after client inquiries in October, argues that such companies resemble investment funds rather than operational businesses. This distinction is crucial as MSCI traditionally excludes pure investment vehicles from its equity indexes. The move has sparked intense debate within the financial sector, with affected companies contending the proposal represents unfair discrimination against cryptocurrency innovation.
Michael Saylor’s MicroStrategy, which transformed from a software company into a bitcoin acquisition vehicle, stands as the most prominent potential casualty. Since initiating its bitcoin purchasing strategy in 2020, MicroStrategy’s stock skyrocketed approximately 3,000% before experiencing significant volatility amid cryptocurrency market fluctuations. The company’s shares have declined roughly 43% year-to-date as bitcoin prices retreated from historic highs.
Financial analysts project severe consequences should MSCI proceed with exclusions. Jefferies’ Head of Index Strategy Kaasha Saini noted that the conversation has expanded beyond MSCI to question the fundamental eligibility of digital asset treasury companies across equity indexes generally. Industry experts estimate that exclusion could trigger up to $9 billion in selling pressure on MicroStrategy alone, with passive investors potentially liquidating positions.
The implications extend beyond a single company. According to law firm DLA Piper, at least 200 companies globally now qualify as digital asset treasuries, with combined capitalization approaching $150 billion as of September—a threefold increase from the previous year. MSCI’s preliminary exclusion list identifies 39 companies representing $46.7 billion in market value, including French bitcoin acquisition firm Capital B.
Industry leaders have mounted vigorous opposition. MicroStrategy executives Saylor and CEO Phong Le warned in a public letter that exclusion would force approximately $2.8 billion in immediate stock liquidation and ‘chill’ industry development by blocking access to the $15 trillion passive investment universe. They argue this would ‘drastically weaken their competitive position’ in capital markets.
The decision carries particular significance for companies that have funded cryptocurrency acquisitions through equity offerings. With passive managers estimated to hold up to 30% of large-cap companies’ free float, exclusion could severely constrain future fundraising capabilities. While some executives publicly dismiss concerns, industry insiders acknowledge the potential for increased capital costs across the sector should multiple index providers follow MSCI’s lead.