Strategy, the largest Bitcoin treasury firm, provided feedback to MSCI regarding a proposed policy change aimed at excluding digital asset treasury companies that hold 50% or more of crypto on their balance sheets from stock market index eligibility.
According to the letter, these companies can actively modify their business strategies, with Strategy’s Bitcoin-backed credit instruments cited as an example.
The letter argued that the proposed policy change would skew MSCI’s stance against crypto as an asset class, rather than maintaining neutrality as an index provider.
Strategy noted that MSCI does not exclude other businesses focusing on a single asset class, such as real estate investment trusts (REITs), oil companies, and media portfolios. The letter stated:
“Many financial institutions primarily hold certain types of assets and then package and sell derivatives backed by those assets, like residential mortgage-backed securities.”
It also expressed concerns that implementing the change would “undermine” US President Donald Trump’s aim to establish the U.S. as the global leader in crypto. However, some critics argue that including crypto treasury companies in global indexes introduces various risks.
Related: Strive calls on MSCI to rethink its ‘unworkable’ Bitcoin blacklist
Crypto treasury companies can create systemic risks and spillover effects
MSCI states that crypto treasury companies resemble investment funds rather than conventional operating entities that produce goods and services, according to their findings.
MSCI highlighted that firms dealing in cryptocurrencies often lack standardized valuation methods, complicating accurate accounting and potentially distorting index values.
As of this writing, Strategy holds 660,624 BTC on its balance sheet. The stock has depreciated by over 50% in the past year, according to Yahoo Finance.
Bitcoin (BTC) is currently 15% lower than its value at the beginning of 2025, when it traded above $109,000, indicating that the underlying asset has outperformed its equity counterpart.
The significant volatility of cryptocurrencies could exacerbate the volatility of indexes tracking these companies or lead to correlation risks, where index performance mirrors the crypto market, as noted in a paper from the Federal Reserve.
The Federal Reserve indicated that the prevalent use of leverage among crypto traders amplifies volatility, contributing to the fragility of crypto as an asset class.
MSCI’s proposed policy change, scheduled to take effect in January, may also lead treasury companies to divest their crypto holdings to align with new eligibility criteria for index inclusion, creating further selling pressure in digital asset markets.
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