Strive's Appeal to MSCI
Nasdaq-listed Strive, the 14th-largest publicly traded Bitcoin treasury company, is urging MSCI to reconsider its proposed exclusion of major Bitcoin-holding firms from its indices. The move could significantly impact companies with substantial digital asset holdings, prompting industry leaders to voice concerns about potential repercussions in the market.
In a detailed letter to MSCI’s CEO Henry Fernandez, Strive argued that excluding companies that hold more than 50% of their assets in digital currencies would diminish passive investment options in growing sectors. The company emphasizes that such a move would overlook the strategic importance of these firms and their contributions to the broader financial ecosystem.
Earlier warnings from JPMorgan analysts highlighted the stakes, noting that Strategy, a prominent Bitcoin treasury enterprise listed in the MSCI World Index, could face losses exceeding $2.8 billion if MSCI proceeds with the exclusion plan. Strategy’s chairman, Michael Saylor, confirmed ongoing discussions with MSCI to address the issue and seek alternative classification options.
Bitcoin Miners and AI Diversification
Strive CEO Matt Cole highlighted a notable trend among large Bitcoin miners like MARA Holdings, Riot Platforms, and Hut 8. These firms are rapidly diversifying their infrastructure to support artificial intelligence (AI) computing, leveraging their significant power resources. Cole pointed out that the AI race is increasingly constrained by energy access rather than semiconductor availability, positioning Bitcoin miners as vital players in this technological evolution.
“Many analysts believe that the AI race is increasingly limited by power availability rather than hardware,” Cole stated. “Bitcoin miners are ideally positioned to meet this demand. Despite revenue generated from AI, their Bitcoin holdings remain a key asset, and excluding them from indices would hinder investor participation in one of the fastest-growing sectors.”
Growth of Bitcoin Structured Finance
Cole also emphasized the rise of Bitcoin-related structured finance products, such as derivatives and notes linked to Bitcoin’s performance. Companies like Strategy and Metaplanet offer these innovative financial instruments, which are aligned with traditional banking giants like JP Morgan, Morgan Stanley, and Goldman Sachs.
He argued that Bitcoin structured finance is a legitimate, expanding business area: “This is as real as traditional finance for us. We intend for this to be our core vertical, and it would be counterproductive for us to compete against traditional financiers burdened by higher capital costs due to index provider penalties on Bitcoin assets.”
Concerns Over the 50% Threshold and Index Inclusion
Cole dismissed the feasibility of a strict 50% asset threshold, noting that volatility in digital assets would cause frequent index rebalancing, increasing costs and tracking errors. Measurement challenges, such as assessing when holdings surpass this threshold amid derivative instruments, further complicate matters.
He pointed out that large companies like Trump Media & Technology Group Corp. — holder of the tenth-largest Bitcoin treasury — were not included in preliminary exclusion lists, despite holding close to 50% of their assets in Bitcoin. Instead, these firms are leveraging derivatives and ETFs to maximize their exposure.
Instead of a broad exclusion, Strive advocates for creating an “ex-digital asset treasury” version of MSCI indices, allowing asset owners to choose suitable benchmarks aligned with their investment mandates.