MSCI is contemplating a brand new rule that will take away corporations from its World Investable Market Indexes if 50% or extra of their property are held in digital property corresponding to Bitcoin. The proposal seems easy, however the implications are far-reaching. It might have an effect on corporations like Michael Saylor’s Technique (previously MicroStrategy), Eric and Donald Trump Jr’s American Bitcoin Corp (ABTC), and dozens of others throughout world markets whose enterprise fashions are totally official, totally regulated, and totally aligned with long-standing company treasury practices.
The aim of this doc is to elucidate what MSCI is proposing, why the issues raised round Bitcoin treasury corporations are overstated, and why excluding these companies would undermine benchmark neutrality, scale back representativeness, and introduce extra instability—not much less—into the indexing system.
MSCI launched a session to find out whether or not corporations whose major exercise entails Bitcoin or different digital-asset treasury administration ought to be excluded from its flagship fairness indices if their digital-asset holdings exceed 50% of complete property. The proposed implementation date is February 2026.
The proposal would sweep in a broad set of corporations:
Technique (previously MicroStrategy), a serious software program and business-intelligence agency that holds Bitcoin as a treasury reserve. American Bitcoin Corp (ABTC), a brand new public firm created by Eric and Donald Trump with a Bitcoin-focused steadiness sheet. Miners, infrastructure companies, and diversified working corporations that use Bitcoin as a long-term inflation hedge or capital reserve.
These corporations are all publicly traded working entities with audited financials, actual merchandise, actual clients, and established governance. None are “Bitcoin ETFs.” Their solely distinction is a treasury technique that features a liquid, globally traded asset.
JPMorgan analysts just lately warned that Technique might resist $2.8B in passive outflows if MSCI removes it from its indices, and as much as $8.8B if different index suppliers comply with.
Their evaluation accurately identifies the mechanical nature of passive flows. Nevertheless it misses the actual context.
Technique has traded greater than $1 trillion in quantity this 12 months.The “catastrophic” $2.8B state of affairs represents:
Lower than one common buying and selling day ~12% of a typical week ~3% of a typical month 0.26% of year-to-date buying and selling circulate
In liquidity phrases, that is immaterial. The narrative of a liquidity disaster doesn’t match market construction actuality. The bigger concern just isn’t the outflow itself—it’s the precedent that index exclusion would set.
If benchmark suppliers start eradicating corporations due to the composition of their treasury property, the definition of what qualifies as an “eligible firm” turns into non-neutral.
MSCI’s coverage place additionally conflicts with the composition of MSCI’s personal property.
MSCI stories roughly $5.3B in complete property.Greater than 70%—about $3.7B—is goodwill and intangible property. These are non-liquid, non-marketable accounting entries that can’t be offered or marked to market. They don’t seem to be verifiable in the identical means that digital property are.
Bitcoin, against this:
Trades globally 24/7 Has clear value discovery Is totally auditable and mark-to-market Is extra liquid than almost any company treasury asset exterior sovereign money
The proposal would penalize corporations for holding an asset that’s much more liquid, clear, and objectively priced than the intangibles that dominate MSCI’s personal steadiness sheet.
MSCI is a worldwide standard-setter. Its benchmarks are utilized by trillions of {dollars} in capital allocation. These indices are ruled by extensively accepted ideas—neutrality, representativeness, and stability. The proposed digital-asset threshold contradicts all three.
Neutrality
Benchmarks should keep away from arbitrary discrimination amongst lawful enterprise methods.Firms are usually not eliminated for holding:
Giant money positions Gold reserves Overseas alternate reserves Commodities Actual property Receivables that exceed 50% of property
Digital property are the one treasury asset singled out for exclusion. Bitcoin is authorized, regulated, and extensively held by establishments worldwide.
Representativeness
Indices are supposed to replicate investable markets—not curate them.
Bitcoin treasury methods are more and more utilized by companies of all sizes as a long-term capital-preservation software. Eradicating these corporations reduces the accuracy and completeness of MSCI’s indices, giving traders a distorted view of the company panorama.
Stability
The 50% threshold creates a binary cliff impact.Bitcoin routinely strikes 10–20% in regular buying and selling. An organization might fall out and in of index eligibility a number of occasions a 12 months merely because of value motion, forcing:
Pointless turnover Further monitoring error Greater fund implementation prices
Index suppliers usually keep away from guidelines that amplify volatility. This rule would introduce it.
Pressured Promoting
If MSCI proceeds, passive index funds would want to promote holdings in affected corporations.But the real-world influence is marginal as a result of:
Technique and ABTC are extremely liquid Flows symbolize a tiny fraction of regular buying and selling quantity Energetic managers are free to proceed holding or rising publicity
Entry to Capital
Analysts warn that exclusion might “sign” danger. However markets adapt shortly.So long as an organization is:
Liquid Clear Capable of elevate capital Capable of talk its treasury policyIt stays investable. Index exclusion is an inconvenience—not a structural impairment.
Precedent Threat
If MSCI embeds asset-based exclusion guidelines, it units a template for eradicating corporations primarily based on their financial savings choices quite than their enterprise fundamentals.
That may be a path towards politicizing world benchmarks.
Bitcoin treasury methods are increasing internationally:
Japan (Metaplanet) Germany (Aifinyo) Europe (Capital B) Latin America (a number of mining and infrastructure companies) North America (Technique, ABTC, miners, and energy-Bitcoin hybrids)
If MSCI excludes these corporations disproportionately, U.S. and Western corporations are positioned at a aggressive drawback relative to jurisdictions that embrace digital capital.
Indexes are supposed to replicate markets—not choose nationwide winners and losers.
MSCI’s current dealing with of Metaplanet’s public providing exhibits it understands the dangers of “reverse turnover.” To keep away from index churn, MSCI selected to not implement the occasion on the time of providing.
This acknowledgement underscores a broader reality: inflexible guidelines can destabilize indices.A digital-asset threshold creates related fragility on a a lot bigger scale.
MSCI can obtain transparency and analytical readability with out excluding lawful working corporations.
A. Enhanced Disclosure
Require standardized reporting of digital-asset holdings in public filings.This offers traders readability with out altering index composition.
B. Classification or Sub-Sector Label
Add a class corresponding to “Digital Asset Treasury–Built-in” to assist traders differentiate enterprise fashions.
C. Liquidity or Governance Screens
If issues are about liquidity, governance, or volatility, MSCI ought to use the factors it already applies uniformly throughout sectors.
None require exclusion.
The proposal doesn’t remedy an actual drawback.It creates a number of:
Reduces representativeness of world indices Violates neutrality by discriminating in opposition to a particular treasury asset Creates pointless turnover for passive funds Damages world competitiveness Units a precedent for non-neutral index building
Bitcoin is cash. Firms shouldn’t be penalized for saving cash—or for selecting a long-term treasury asset that’s extra liquid, extra clear, and extra objectively priced than most company intangibles.
Indexes should replicate markets as they’re—not as gatekeepers want them to be.
MSCI ought to withdraw the proposal and keep the neutrality that has made its benchmarks trusted throughout world capital markets.
Disclaimer: This content material was ready on behalf of Bitcoin For Companies for informational functions solely. It displays the writer’s personal evaluation and opinion and shouldn’t be relied upon as funding recommendation. Nothing on this article constitutes a suggestion, invitation, or solicitation to buy, promote, or subscribe for any safety or monetary product.
