MSCI Proposal Threatens Bitcoin Treasury Companies Like Michael Saylor’s Strategy

NEW YORK, NY — MSCI, the world’s second-largest index provider, proposed a new rule on October 10 that could negatively impact companies classified as digital asset treasury firms. These firms primarily hold bitcoin and other digital assets and currently manage over $180 billion in cryptocurrency.

If the proposal passes, companies whose digital assets exceed 50% of their total assets may be reclassified as ‘funds’ rather than operating businesses. This change could lead to removal from MSCI benchmarks, a development that caused shares of the largest bitcoin treasury, Michael Saylor‘s Strategy, to drop nearly 20%.

Saylor has leveraged his bitcoin holdings for financial engineering, creating structured financial products, but now faces uncertainty. Funds that track MSCI indexes together hold $9 billion of Strategy’s $54 billion market capitalization, with about $2.8 billion at risk if MSCI pushes through its measure.

The proposal has sparked concern over whether companies dealing in bitcoin should be categorized as funds. Critics like Saylor argue that their financial strategies define their operations. Vivek Ramaswamy‘s Strive Asset Management, which holds $704 million in bitcoin, has criticized MSCI’s plan, stating it contradicts the fundamental principle of passive investment neutrality.

“An index provider should not take a view,” Strive states in a letter to MSCI Chairman Henry Fernandez, arguing that investors can already choose to exclude bitcoin-heavy firms through custom indexes. The firm also points to companies like mining operations that are diversifying into AI infrastructure, suggesting a need for a more nuanced industry definition.

Strive’s execs, including Chief Investment Officer Ben Werkman, argue that bitcoin’s status has evolved. Once viewed as fringe, significant institutional interest now influences product offerings, with major banks introducing bitcoin-linked financial products. They warn that misclassification could stifle growth in the U.S. while allowing international markets to thrive.

Concerns also highlight practical issues with the proposed 50% threshold. Bitcoin‘s notorious volatility may cause companies to fluctuate in and out of index eligibility, complicating tracking for fund managers. Additionally, accounting discrepancies stemming from different international regulations could further complicate the measurement.

Some experts, however, support MSCI’s view. Austin Campbell, a professor at NYU, suggests that these businesses primarily engage in holding products rather than originating them, questioning their classification as operating companies. Similarly, Steven Schoenfeld of MarketVector Indexes argues MSCI’s approach aims to standardize rules for digital asset treasury firms.

The final decision from MSCI is set for January 15. A rejection of the proposal could benefit bitcoin advocates, while a confirmation might hinder new corporate cryptocurrency ventures.