Strategy, formerly known as MicroStrategy, has issued a warning to MSCI regarding the potential exclusion of companies holding Bitcoin treasuries from its indexes. The company argues that such a move could significantly harm U.S. economic and national security interests, particularly amid ongoing consultations by MSCI on its index methodology.
The core of Strategy's concern lies in the potential for substantial capital outflows and a chilling effect on institutional involvement in Bitcoin. This exclusion could disproportionately affect Strategy's stock value and the broader U.S. digital asset industry's competitiveness on a global scale.
Strategy Opposes MSCI's Bitcoin Index Exclusion Plan
Strategy, which holds the largest corporate Bitcoin treasury, has formally raised objections to MSCI's consideration of excluding companies with more than 50% of their assets in digital currencies. This response comes in the wake of MSCI's public consultation on its index methodology for companies heavily invested in digital assets.
“Excluding DATs would have profoundly harmful consequences for both investors and the broader digital asset industry and conflicts with U.S. pro-innovation policy.” Michael Saylor, Founder & Chairman, Strategy (MicroStrategy)
Potential $2.8 Billion Stock Outflows Forecasted
Strategy has projected significant financial repercussions, estimating potential forced stock outflows of up to $2.8 billion if companies like Strategy are excluded from MSCI indexes. This scenario could deter institutional investors from allocating capital to companies that hold Bitcoin as a treasury asset.
The company argues that such an exclusion policy would run counter to the United States' stated pro-innovation policies and could undermine national security objectives. Strategy points out that Bitcoin-focused firms, unlike companies in other concentrated sectors, face the risk of being unfairly targeted, raising questions about the fairness and consistency of proposed policy changes.
MSCI's Policy Shift Challenges Historical Index Neutrality
Historically, MSCI has maintained a stance of index neutrality, refraining from excluding entire sectors such as gold or real estate from its benchmarks. Strategy contends that this proposed discrimination against digital asset companies represents a departure from this established practice and sets a concerning precedent for the evolving digital asset landscape.
Financial experts suggest that a shift in MSCI's index policies could negatively impact the United States' global competitiveness in the rapidly growing digital asset markets. Given MSCI's past adherence to index neutrality, a departure from this principle could lead to destabilization of established market dynamics and affect corporate strategies regarding Bitcoin reserves.