The news that MSCI — one of the leading global index providers — is considering the exclusion of digital asset treasuries (DATs) from its indexes has sent shockwaves through the crypto community. JP Morgan’s mention of this in their research note on Strategy only intensified the discussion, bringing the term “Operation Chokepoint” back into focus on Crypto Twitter. Yet, MSCI might have a legitimate concern regarding DATs.
MSCI ranks among the largest index providers globally, managing over $18 trillion in ETFs and institutional assets linked to its benchmarks. Therefore, safeguarding investors is a critical component of their role — they emphasize this continuously in their index methodology documents. Approval of an asset for inclusion in their indexes carries significant weight. Unfortunately, it remains uncertain whether DATs can genuinely meet these criteria.
The rise and fall of DATs
Up until recently, Strategy (formerly MicroStrategy) was the sole player in the Bitcoin treasury landscape. Initially a software company, Strategy (under the ticker MSTR) gradually shifted away from its original focus under Michael Saylor’s leadership, morphing into a leveraged BTC investment listed on the stock market.
This pivot paid off significantly. From its inaugural Bitcoin purchase in August 2020 to its zenith in June 2025, MSTR’s share price skyrocketed over 3,000%. Its success prompted numerous other companies to seek a similar opportunity. Consequently, this year, the DAT trend mushroomed — their numbers surged from just 4 in 2020 to 142 by October 2025, with over half created this year alone. We even witnessed corporate entities investing in volatile tokens like DOGE, ZEC, or WLFI, far more erratic than BTC.
However, this isn’t the sole concern. Many newly formed corporate entities procured funds to buy crypto under significantly harsher terms than Strategy, which benefits from unsecured convertible debt providing flexibility in repayments. Others have resorted to secured debt — facing stricter collateral requirements and limited maneuverability — while purchasing crypto at notably higher average prices.
Max pain
As a result, DATs are currently reeling from the harsh crypto sell-off in recent weeks. The market cap of DATs plummeted almost by half from July’s $176 billion peak to approximately $99 billion in mid-November, with many now trading below their net asset values (NAVs). For investors eyeing these stocks currently, this could represent a discount — should they find future value, which remains uncertain. In the meantime, early investors are experiencing the downturn as stock prices for crypto treasuries fall.
Even Strategy’s shares have dipped 40% year-to-date, and Tom Lee’s BitMine is down nearly 80% from its peak (although its shares are up nearly 300% YTD). Nonetheless, Saylor and Lee have effectively structured their investments, allowing them to capitalize on the dip — which both have been doing. Others, however, have not been so fortunate.
After enduring severe sell-offs, several DATs have been compelled to divest their crypto assets — likely at a loss — to fund share buybacks. Recently, ETH treasury firm ETHZilla liquidated $40 million in tokens, while FG Nexus had to sell over 10,922 ETH to repurchase around 8% of its publicly tradable shares. Similarly, early in November, BTC treasury Sequans offloaded 970 Bitcoin to settle half of its convertible debt. Such forced liquidations are rare for publicly traded firms, especially shortly after their establishment, highlighting evident structural problems.
It appears the dominoes are beginning to topple, and we are not yet facing a crypto winter. For now, this marks just a typical bull market correction. Yet, it is especially troubling that these companies are suffering so severely at this stage —what could transpire if we encounter a downturn resembling that of 2022?
As someone who monitors the crypto market closely each day, I have harbored concerns regarding the systemic risks associated with DATs for some time. Why shouldn’t MSCI be apprehensive about including these assets in its indexes? Approval would imply that DATs are investable, well-managed, and sufficiently transparent. Conversely, excluding them indicates an intolerable level of risk, structural problems, or concerns regarding liquidity or governance. It’s evident that many DATs fall into the latter category.
The TradFi game
Not all DATs, however, are created equal. While many crypto firms currently in the market may not withstand a genuine downturn, companies like BitMine and Strategy are likely to weather the storm. Thus, one could argue that MSCI risks overlooking viable firms in its sweeping assessment.
Nonetheless, MSCI is justifiably cautious concerning DATs. Numerous are risky enterprises that have leaped onto the hype bandwagon in pursuit of quick profits. Their exclusion from significant investment indexes doesn’t signify a coordinated assault on crypto as a whole — it represents TradFi’s prudence and focus on protecting investors.
As crypto increasingly integrates with the traditional financial landscape, acceptance of this reality is essential. These challenges are part and parcel of a significant evolution. Ultimately, these rigorous standards may prove beneficial, gradually strengthening the case for legitimate digital asset treasuries while eliminating poorly structured, risky firms before they can inflict systemic damage.
