MSCI is contemplating a brand new rule that might take away firms from its World Investable Market Indexes if 50% or extra of their property are held in digital property similar to Bitcoin. The proposal seems easy, however the implications are far-reaching. It might have an effect on firms 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 absolutely professional, absolutely regulated, and absolutely aligned with long-standing company treasury practices.
The aim of this doc is to elucidate what MSCI is proposing, why the considerations raised round Bitcoin treasury firms 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 firms whose main exercise entails Bitcoin or different digital-asset treasury administration must be excluded from its flagship fairness indices if their digital-asset holdings exceed 50% of whole property. The proposed implementation date is February 2026.
The proposal would sweep in a broad set of firms:
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 stability sheet. Miners, infrastructure companies, and diversified working firms that use Bitcoin as a long-term inflation hedge or capital reserve.
These firms are all publicly traded working entities with audited financials, actual merchandise, actual prospects, and established governance. None are “Bitcoin ETFs.” Their solely distinction is a treasury technique that features a liquid, globally traded asset.
JPMorgan analysts not too long ago 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. But it surely misses the true 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 move
In liquidity phrases, that is immaterial. The narrative of a liquidity disaster doesn’t match market construction actuality. The bigger subject just isn’t the outflow itself—it’s the precedent that index exclusion would set.
If benchmark suppliers start eradicating firms 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 reviews roughly $5.3B in whole property.Greater than 70%—about $3.7B—is goodwill and intangible property. These are non-liquid, non-marketable accounting entries that can not be offered or marked to market. They aren’t verifiable in the identical approach that digital property are.
Bitcoin, in contrast:
Trades globally 24/7 Has clear value discovery Is absolutely auditable and mark-to-market Is extra liquid than practically any company treasury asset exterior sovereign money
The proposal would penalize firms for holding an asset that’s much more liquid, clear, and objectively priced than the intangibles that dominate MSCI’s personal stability sheet.
MSCI is a world standard-setter. Its benchmarks are utilized by trillions of {dollars} in capital allocation. These indices are ruled by broadly 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 aren’t eliminated for holding:
Massive 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 broadly held by establishments worldwide.
Representativeness
Indices are supposed to replicate investable markets—not curate them.
Bitcoin treasury methods are more and more utilized by firms of all sizes as a long-term capital-preservation device. Eradicating these firms 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 as a consequence of value motion, forcing:
Pointless turnover Extra monitoring error Increased fund implementation prices
Index suppliers usually keep away from guidelines that amplify volatility. This rule would introduce it.
Compelled Promoting
If MSCI proceeds, passive index funds would want to promote holdings in affected firms.But the real-world affect is marginal as a result of:
Technique and ABTC are extremely liquid Flows characterize 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 rapidly.So long as an organization is:
Liquid Clear Capable of increase capital Capable of talk its treasury policyIt stays investable. Index exclusion is an inconvenience—not a structural impairment.
Precedent Danger
If MSCI embeds asset-based exclusion guidelines, it units a template for eradicating firms primarily based on their financial savings choices slightly than their enterprise fundamentals.
That could 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 firms disproportionately, U.S. and Western firms 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 reveals 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 fact: 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 firms.
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 similar to “Digital Asset Treasury–Built-in” to assist traders differentiate enterprise fashions.
C. Liquidity or Governance Screens
If considerations 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 towards a selected 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 choose 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.
