MSCI is considering a new rule that would remove companies from its Global Investable Market Indexes if 50% or more of their assets are contained in digital assets such as Bitcoin. The proposal seems simple, but the consequences are far-reaching. It would affect companies like Michael Saylor’s Strategy (formerly MicroStrategy), Eric and Donald Trump Jr’s American Bitcoin Corp (ABTC) and dozens of others across global markets whose business models are fully legitimate, fully regulated and fully aligned with long-standing corporate practices in the financial sector.
The purpose of this document is to explain what MSCI is proposing, why the concerns raised about Bitcoin finance companies are overstated, and why excluding these firms would undermine benchmark neutrality, reduce representativeness and introduce more instability – not less – into the indexing system.
MSCI launched a consultation to determine whether companies whose primary activity involves Bitcoin or other financial management of digital assets should be excluded from their flagship stock indices if their holdings of digital assets exceed 50% of total assets. The proposed implementation date is February 2026.
The proposal will sweep into a wide range of companies:
- Strategy (formerly MicroStrategy), a large software and business-intelligence company that holds Bitcoin as a treasury reserve.
- American Bitcoin Corp (ABTC), a new public company created by Eric and Donald Trump with a Bitcoin-focused balance sheet.
- Miners, infrastructure companies and diversified operating companies using Bitcoin as a long-term inflation hedge or capital reserve.
These companies are all listed operating units with audited financials, real products, real customers and established management. None are “Bitcoin ETFs.” Their only difference is a financial strategy that includes a liquid, globally traded asset.
JPMorgan analysts recently warned that Strategy could face up to $2.8bn. in passive outflows if MSCI removes it from its indexes, and up to $8.8 billion if other index providers follow suit.
Their analysis correctly identifies the mechanical nature of passive flows. But it misses the real context.
Strategy has acted more than $1 trillion in volume this year.
The “catastrophic” $2.8B scenario represents:
- Less than one average trading day
- ~12% of a typical week
- ~3% of a typical month
- 0.26% of year-to-date trade flow
In terms of liquidity, this is immaterial. The narrative of a liquidity crisis does not match the reality of the market structure. The biggest problem isn’t the outflow itself – it’s the precedent that index exclusion would set.
If benchmark providers start removing companies due to the composition of their own assets, the definition of what qualifies as an “eligible company” becomes non-neutral.
MSCI’s political stance also conflicts with the composition of MSCI’s own assets.
MSCI reports roughly $5.3 billion in total assets.
more than 70%-sore $3.7 billion— are goodwill and intangible assets. These are illiquid, non-negotiable accounting items that cannot be sold or marketed. They cannot be verified in the same way as digital assets.
Bitcoin, on the other hand:
- Trades globally 24/7
- Has transparent price discovery
- Is fully auditable and mark-to-market
- Is more liquid than almost any non-Treasury financial asset
The proposal will penalize companies for holding an asset, i.e far more liquid, transparent and objectively priced than the intangible assets that dominate MSCI’s own balance sheet.
MSCI is a global standard setter. Its benchmarks are used by trillions of dollars in capital allocation. These indices are guided by widely accepted principles – neutrality, representativeness and stability. The proposed threshold for digital assets contradicts all three.
Neutrality
Benchmarks must avoid arbitrary discrimination among legitimate business strategies.
Companies are not removed for holding:
- Large cash positions
- Gold reserves
- Currency reserves
- Raw materials
- Real estate
- Receivables that exceed 50% of assets
Digital assets are the only treasury asset designated for exclusion. Bitcoin is legal, regulated and widely owned by institutions worldwide.
Representativeness
Indices are intended to reflect investable markets – not curate them.
Bitcoin treasury strategies are increasingly used by businesses of all sizes as a long-term capital preservation tool. Removing these companies reduces the accuracy and completeness of MSCI’s indices, giving investors a distorted view of the corporate landscape.
Stability
The 50% threshold creates a binary clipping effect.
Bitcoin routinely moves 10-20% in normal trading. A company can fall in and out of index eligibility several times a year simply due to price action, forcing:
- Unnecessary turnover
- Additional tracking errors
- Higher fund implementation costs
Index providers typically avoid rules that amplify volatility. This rule would introduce that.
Forced sale
If MSCI continues, passive index funds will have to sell holdings in affected companies.
However, the real-world impact is marginal because:
- Strategy and ABTC are very liquid
- Flow represents a small fraction of normal trading volume
- Active managers are free to continue to hold or increase exposure
Access to capital
Analysts warn that exclusion could “signal” risk. But markets adapt quickly.
As long as a company is:
- Liquid
- Transparent
- Can raise capital
- Able to communicate its fiscal policy
It remains investable. Index exclusion is a disadvantage – not a structural impairment.
The risk of precedent
If MSCI embeds asset-based exclusion rules, it sets a template for removing companies based on their savings decisions rather than their business fundamentals.
It is a path towards the politicization of global benchmarks.
Bitcoin treasury strategies expand internationally:
- Japan (Metaplanet)
- Germany (Aifinyo)
- Europe (capital B)
- Latin America (several mining and infrastructure companies)
- North America (Strategy, ABTC, Miners and Energy Bitcoin Hybrids)
If MSCI disproportionately excludes these companies, US and Western companies will be at a competitive disadvantage compared to jurisdictions that embrace digital capital.
Indices are meant to reflect markets – not pick national winners and losers.
MSCI’s recent handling of Metaplanet’s public offering shows that it understands the risk of “reverse turnover.” In order to avoid index departure, MSCI chose not to carry out the event at the time of the offer.
This recognition underscores a broader truth: rigid rules can destabilize indexes.
A digital asset threshold creates similar fragility on a much larger scale.
MSCI can achieve transparency and analytical clarity without excluding legitimate operating companies.
A. Enhanced Disclosure
Require standardized reporting of holdings of digital assets in public archives.
This gives investors clarity without changing the index composition.
B. Classification or subsector mark
Add a category such as “Digital Asset Treasury-Integrated” to help investors differentiate business models.
C. Screens for liquidity or management
If concerns are about liquidity, governance or volatility, MSCI should use the criteria it already applies consistently across sectors.
No one is demanding exclusion.
The proposal does not solve a real problem.
It creates several:
- Reduces the representativeness of global indexes
- Violates neutrality by discriminating against a specific financial asset
- Creates unnecessary turnover for passive funds
- Harms global competitiveness
- Sets precedent for non-neutral index construction
Bitcoin is money. Companies should not be penalized for saving money – or for choosing a long-term treasury asset that is more liquid, more transparent and more objectively priced than most companies’ intangible assets.
Indices should reflect the markets as they are – not as gatekeepers prefer them to be.
MSCI should withdraw the proposal and maintain the neutrality that has made its benchmarks trusted across global capital markets.
Disclaimer: This content has been prepared on behalf of Bitcoin for businesses for information purposes only. It reflects the author’s own analysis and opinion and should not be relied upon as investment advice. Nothing in this article constitutes an offer, invitation or solicitation to buy, sell or subscribe to any security or financial product.