Strategy, a prominent Bitcoin treasury company, has formally submitted feedback to the index company MSCI regarding its proposed policy change that would exclude digital asset treasury companies holding 50% or more in crypto on their balance sheets from stock market index inclusion.
The company argues that digital asset treasury companies are dynamic operating entities capable of actively adjusting their business strategies. Strategy highlighted its own Bitcoin-backed credit instruments as an example of this operational flexibility.
According to Strategy's letter, the proposed policy change by MSCI would introduce a bias against cryptocurrency as an asset class, rather than allowing the index company to function as a neutral arbiter.
Strategy points out that MSCI does not apply similar exclusionary criteria to other types of businesses that invest heavily in a single asset class. This includes real estate investment trusts (REITs), oil companies, and media portfolios. The letter states:
“Many financial institutions primarily hold certain types of assets and then package and sell derivatives backed by those assets, like residential mortgage-backed securities.”
Furthermore, Strategy contends that implementing this change would undermine the stated goal of US President Donald Trump to establish the United States as the global leader in crypto. However, there are opposing viewpoints that suggest including crypto treasury companies in global indexes could introduce significant risks.
Concerns Regarding Systemic Risks and Spillover Effects from Crypto Treasury Companies
MSCI has indicated that crypto treasury companies exhibit characteristics more aligned with investment funds rather than traditional operating companies that produce goods and services.
The index company also noted that companies heavily capitalized by cryptocurrencies often lack clear and uniform valuation methods. This can complicate accounting practices and potentially lead to skewed index values.
At the time of reporting, Strategy held 660,624 BTC on its balance sheet. Data from Yahoo Finance indicates that the company's stock has experienced a decline of over 50% in value over the past year.
Bitcoin (BTC) is also trading below its value from the beginning of 2025, when it surpassed $109,000. This suggests that the underlying digital asset has outperformed the equity of companies holding it.
A paper published by the Federal Reserve highlights that the inherent high volatility of cryptocurrencies could amplify the volatility of indexes that track companies holding these assets. This could also create correlation risks, where the performance of an index would closely mirror the fluctuations of the cryptocurrency market.
The Federal Reserve's research also points out that the widespread use of leverage by crypto traders can magnify volatility and contribute to the fragility of cryptocurrencies as an asset class.
MSCI's proposed policy change, scheduled to be implemented in January, could compel treasury companies to divest their crypto holdings to meet the new eligibility requirements for index inclusion. Such a move could generate additional selling pressure within digital asset markets.