MSCI May Exclude Digital Asset Treasury Firms, Putting “Meaningful Pressure” on the Sector
The international crypto sector is bracing for potential turbulence as main index supplier MSCI weighs whether or not to exclude digital asset–heavy corporations from its flagship fairness benchmarks, a transfer analysts warn might drive billions in passive outflows early subsequent 12 months.
Key Takeaways:
- MSCI is contemplating eradicating Bitcoin-heavy treasury corporations from its main indexes, which might drive billions in passive fund outflows.
- Investors say these companies more and more resemble funding funds, placing corporations like Strategy, Riot, and Marathon susceptible to exclusion.
- JPMorgan warns Strategy alone might see as much as $2.8B in promoting strain.
The dialogue, which started quietly in October, has gained urgency after MSCI confirmed it is consulting the funding neighborhood on whether or not companies holding greater than 50% of their steadiness sheet in Bitcoin or different cryptocurrencies ought to stay eligible for inclusion.
MSCI Weighs Exclusion of Bitcoin Treasury Firms Seen as ‘Investment Funds’
Feedback submitted up to now signifies that many buyers view digital asset treasury corporations (DATs) as behaving extra like funding funds fairly than conventional working companies, a class MSCI doesn’t usually permit in its core fairness indexes.
The overview runs by Dec. 31, with a last choice scheduled for Jan. 15 and any index changes arriving in February.
A preliminary record names 38 corporations beneath overview, together with Michael Saylor’s Strategy, Sharplink Gaming, Riot Platforms, and Marathon Digital.
A JPMorgan notice this week warned that Strategy alone might lose as a lot as $2.8 billion if MSCI excludes DATs, with roughly $9 billion of its estimated $56 billion market cap at the moment held by passive index funds.
JPMorgan analysts mentioned Strategy risked being dropped from MSCI USA and the Nasdaq 100. They estimated that MSCI removing alone might set off as much as $2.8B in outflows, with extra if different index suppliers observe.
Passive funds tied to the firm already account for almost $9B in market publicity, and a call is predicted by Jan. 15.
For a enterprise that constructed its model on wrapping Bitcoin publicity inside an fairness ticker, index removing would hit greater than buying and selling volumes.
It would chip away at the institutional credibility that when made Strategy a preferred approach for fund managers to achieve regulated entry to the world’s largest cryptocurrency.
Strategy’s ascent adopted a easy flywheel. The agency offered inventory, purchased Bitcoin, then used every rally in the token to justify extra issuance and extra accumulation. At the peak, its market worth traded far above the worth of its Bitcoin holdings.
That premium has largely disappeared and the firm’s valuation now sits solely barely above the value of its crypto reserves, an indication that investor conviction has pale.
Bitcoin’s Drop Tests Strategy’s Once-Reliable Momentum Engine
Bitcoin has shed greater than 30% since its October peak, wiping over $1 trillion from the broader crypto market.
Strategy’s market web asset worth (mNAV), the ratio evaluating its enterprise worth to its Bitcoin stash, has slipped to simply above 1.1, signaling that the inventory is buying and selling solely marginally above the worth of the cash it holds.
The self-reinforcing cycle that when pushed Strategy’s shares larger with each new Bitcoin buy is now not delivering the identical raise.
Yet Michael Saylor continues to press forward. Earlier this week, Strategy bought 8,178 BTC for $835.6 million, paying a median of $102,171 per coin together with charges.
The buy brings the firm’s whole holdings to 649,870 BTC as of Nov. 16, 2025, collected at a mixed price of $48.37 billion, or $74,433 per Bitcoin on common.
Attention now turns as to whether index suppliers and capital markets will proceed backing this strategy as the crypto cycle shifts and Bitcoin’s momentum cools.
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