The MSCI is reportedly evaluating a new rule that would lead to the exclusion of companies from its Global Investable Market Indexes if 50% or more of their assets are allocated to digital assets such as Bitcoin. While the proposal may initially appear straightforward, its ramifications extend deeply. This move would impact firms like Strategy (formerly MicroStrategy), American Bitcoin Corp (ABTC), established by Eric and Donald Trump Jr., among numerous others globally, whose business models are entirely legitimate, rigorously regulated, and consistent with long-established corporate treasury practices.

This document aims to clarify MSCI’s proposal, address exaggerated concerns regarding Bitcoin treasury firms, and illustrate how the exclusion of these organizations would compromise benchmark neutrality, hinder representativeness, and contribute to heightened instability rather than mitigated risks within the indexing system.

1. What MSCI Is Proposing

MSCI has initiated a consultation process to assess the potential exclusion of companies primarily engaged in Bitcoin or other digital-asset treasury management from its leading equity indices, should their digital-asset holdings surpass 50% of total assets. The proposed implementation date is set for February 2026.

The proposal would encompass a wide array of companies:

• Strategy (formerly MicroStrategy), a prominent software and business intelligence company that retains Bitcoin as part of its treasury reserves.
• American Bitcoin Corp (ABTC), a recently established public entity with a balance sheet focused on Bitcoin.
• Miners, infrastructure firms, and diversified operating companies that consider Bitcoin as a long-term inflation hedge or capital reserve.

These entities are recognized as publicly traded firms with audited financial statements, tangible products, genuine customer bases, and established governance frameworks. They are distinct from Bitcoin ETFs in that their only unique characteristic is a treasury strategy that includes a liquid, globally traded asset.

2. The JPMorgan Warning — And the Reality Behind It

JPMorgan analysts have recently alerted that the exclusion of Strategy from MSCI indices could trigger passive outflows of up to $2.8 billion, and potentially $8.8 billion if other index providers adopt similar measures.

While their evaluation accurately highlights the mechanical nature of passive flows, it overlooks the broader context.

Strategy has recorded more than $1 trillion in trading volume this year. The purported “catastrophic” scenario of $2.8 billion represents:

• Less than one average trading day
• Approximately 12% of a typical week
• About 3% of a standard month
• 0.26% of year-to-date trading flow

From a liquidity perspective, this figure is negligible. The narrative surrounding a liquidity crisis does not align with the realities of market structure. More significant is not the outflow itself, but rather the precedent that such an exclusion would establish.

Should benchmark providers begin excluding firms based solely on their treasury asset compositions, the definition of what qualifies as an “eligible company” would no longer adhere to principles of neutrality.

MSCI $MSTR DE-LISTING FEAR MONGERING: THE $2.8 BILLION LIE

First: Strategy is at ZERO risk of being delisted from other indices. Second: J.P. Morgan says an MSCI delisting would trigger a $2.8 Billion forced sell off. They are banking on you not knowing the math.

I assessed… pic.twitter.com/NszHcnYt69

— Adrian (@_Adrian) November 25, 2025

3. A Contradiction on MSCI’s Own Balance Sheet

MSCI’s policy stance appears to conflict with the composition of its own assets.

MSCI reports approximately $5.3 billion in total assets, of which over 70%—amounting to around $3.7 billion—is classified as goodwill and intangible assets. These entries are non-liquid, non-marketable accounting figures that cannot be sold or marked to market and cannot be verified to the same extent as digital assets.

In contrast, Bitcoin:

• Trades globally on a 24/7 basis
• Exhibits transparent price discovery
• Is fully auditable and subject to mark-to-market valuations
• Demonstrates greater liquidity than nearly any corporate treasury asset, aside from sovereign cash

The proposal would inadvertently penalize firms for holding an asset that is more liquid, transparent, and objectively priced than the intangibles that dominate MSCI’s own balance sheet.

MSCI is a New York based, pubco ( $MSCI) with ~$5.3B in assets on its balance sheet.

70% ($3.7B) of MSCI's assets are classified as “intangible” (goodwill and other intangible assets).​

At the same time, MSCI is proposing to exclude companies whose digital asset holdings… pic.twitter.com/dyVwRR2AhH

— Jeff Walton (@PunterJeff) November 25, 2025

4. How the Proposal Violates Benchmark Principles

As a global standard-setter, MSCI’s benchmarks are integral to the allocation of trillions of dollars in capital. These indices are governed by established principles—neutrality, representativeness, and stability. The suggested digital-asset threshold undermines all three.

Neutrality

Benchmarks are required to eschew arbitrary discrimination among lawful business strategies. Companies are not currently excluded for holding:

• Significant cash positions
• Gold reserves
• Foreign exchange reserves
• Commodities
• Real estate
• Receivables exceeding 50% of assets

Digital assets are the sole treasury asset targeted for exclusion, despite Bitcoin’s legality, regulation, and broad institutional acceptance.

Representativeness

Indices are designed to mirror investable markets rather than curate them.

Bitcoin treasury strategies are increasingly adopted by corporations of various sizes as a viable long-term capital-preservation tool. The exclusion of these firms would diminish both the accuracy and completeness of MSCI’s indices, resulting in a distorted portrayal of the corporate landscape for investors.

Stability

The proposed 50% threshold introduces a binary cliff effect. Bitcoin prices can fluctuate by 10–20% during normal trading. As such, a company could unpredictably oscillate in and out of index eligibility multiple times a year solely due to price movements, resulting in:

• Unnecessary turnover
• Increased tracking error
• Heightened fund implementation costs

Index providers typically refrain from rules that amplify volatility. This proposed regulation would only serve to exacerbate it.

5. The Market Impact of Exclusion

Forced Selling

If MSCI progresses with its proposal, passive index funds would be compelled to divest holdings in the affected companies. However, the tangible market impact is limited due to:

• High liquidity of Strategy and ABTC
• Flows amounting to a minuscule fraction of normal trading volume
• Active managers retaining the freedom to either maintain or increase their exposure

Access to Capital

Analysts caution that exclusion may signal increased risk, but the markets are typically adaptive. Provided a company remains:

• Liquid
• Transparent
• Capable of raising capital
• Able to communicate its treasury policy

It retains investability. Index exclusion poses an inconvenience rather than a structural impairment.

Precedent Risk

Should MSCI implement asset-based exclusion rules, it establishes a framework for removing companies based on their treasury decisions rather than their fundamental business operations.

This could pave the way for the politicization of global benchmarks.

6. The Global Competitiveness Problem

Bitcoin treasury strategies are gaining traction worldwide:

• Japan (Metaplanet)
• Germany (Aifinyo)
• Europe (Capital B)
• Latin America (various mining and infrastructure firms)
• North America (Strategy, ABTC, miners, and energy-Bitcoin hybrids)

By disproportionately excluding these companies, the MSCI risks placing U.S. and Western firms at a competitive disadvantage in comparison to jurisdictions that are more receptive to digital capital.

Indices should accurately reflect markets rather than selectively favor particular national entities.

7. MSCI Already Knows That Exclusion Creates Distortions

MSCI’s recent handling of Metaplanet’s public offering demonstrates its awareness of the risks associated with “reverse turnover.” To mitigate index churn, MSCI deliberately chose not to implement changes during the offering.

This acknowledgment reveals a broader truth: rigid regulations can destabilize indices. Introducing a digital-asset threshold would exacerbate this fragility on a much more extensive scale.

8. Better Alternatives Exist

MSCI can pursue transparency and analytical rigor without excluding lawful operating companies.

A. Enhanced Disclosure

Imposing standardized reporting regarding digital-asset holdings in public filings would provide investors with clear information without altering index composition.

B. Classification or Sub-Sector Label

Introducing a category such as “Digital Asset Treasury–Integrated” would assist investors in distinguishing between different business models.

C. Liquidity or Governance Screens

If liquidity, governance, or volatility are the primary concerns, MSCI can employ criteria uniformly applied across sectors without necessitating exclusion.

9. Why the Proposal Should Be Withdrawn

The proposal does not remedy a genuine issue; rather, it generates several:

• Decreases the representativeness of global indices
• Violates neutrality by targeting a specific treasury asset
• Induces unnecessary turnover for passive funds
• Impacts global competitiveness
• Sets a precedent for non-neutral index construction

Bitcoin is considered a form of currency. Companies should not be subjected to penalties for opting to save money or for selecting a long-term treasury asset that is more liquid, transparent, and objectively priced than the majority of corporate intangible assets.

Indices must accurately reflect market conditions—not merely conform to the preferences of gatekeepers.

The MSCI should withdraw the proposal and uphold the neutrality that has earned its benchmarks a reputation of trust within global capital markets.

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