Bitcoin Treasury Strategy Threatened as MSCI Removes Index

Bitcoin Treasury Giant Strategy Faces Index Removal Under Finalized MSCI Rules

Index provider MSCI has finalized new eligibility rules that could lead to the removal of bitcoin treasury companies such as Strategy and Japan’s Metaplanet from major global equity indexes. The changes are designed to exclude firms MSCI classifies as “non-operating companies,” a category aimed at businesses whose balance sheets are dominated by a single asset and whose growth relies more on capital raising than operating cash flow.

MSCI said the updated framework will begin to apply on Nov. 30, expanding exclusions that already cover vehicles like investment funds and business development companies. Strategy is currently a constituent of the MSCI USA and MSCI World indexes.

According to Reuters, Strategy’s shares fell 4.2% on Friday following the rule adoption.

The decision follows a review process that began about a year ago. MSCI previously considered excluding digital asset treasury firms on the basis that they resemble investment funds, deferred that plan in January, and then broadened the review to cover non-operating companies more generally.

MSCI’s description of the target group focuses on companies that “create value by accumulating and holding non-operating assets,” generate limited cash from operations, and depend on outside capital rather than business performance to expand.

The finalized approach relies on a two-step screen:

• Operating-assets test: whether operating assets exceed 50% of total assets.
• Financial-ratio screen: five ratios are assessed, and companies that fail at least four can be deemed ineligible.

MSCI also introduced buffers intended to reduce turnover and protect index stability. Current constituents face “softer” implementation than firms seeking addition: an existing index member would need to fail the screens across two consecutive annual filings before being deleted, rather than being removed based on a single filing.

In addition to Strategy and Metaplanet being flagged as potential deletions, Reuters said ethereum treasury firm SharpLink and several other crypto treasury companies are on a watchlist for possible removal under MSCI’s simulation process.

MSCI’s indexes are widely used by asset managers and passive index-tracking funds, meaning eligibility changes can lead to forced buying or selling as those funds rebalance to match index constituents. That mechanical effect is why index inclusion and exclusion can matter significantly for a company’s shareholder base and trading dynamics.

Strategy, led by Michael Saylor, has accumulated 840,447 BTC (worth $53.18 billion in the cited data) since 2020, making it the largest publicly listed corporate bitcoin holder, according to Bitcoin Treasuries. Metaplanet has accumulated 43,000 BTC, worth over $2 billion.