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Strategy and Bitcoin-Buying Firms Face Wider Exclusion From Stock Indexes

Strategy and Bitcoin-Buying Firms Face Wider Exclusion From Stock Indexes

December 23, 2025 By admin

A Turning Point for Bitcoin Treasury Companies

A growing group of publicly listed companies has built its identity around one bold strategy: holding bitcoin as a core treasury asset. That approach helped fuel massive rallies over the past few years—but now, it’s facing a major structural challenge.

According to Reuters, leading index provider MSCI is considering excluding companies whose digital asset holdings make up 50% or more of total assets from its global equity benchmarks. A final decision is expected by January 15, 2026.

If implemented, the move could push some of the most prominent bitcoin-buying firms out of major stock indexes—potentially triggering billions of dollars in forced selling by passive funds.

Why MSCI Is Rethinking Eligibility

MSCI’s rationale is straightforward:
Companies whose balance sheets are dominated by digital assets begin to resemble investment vehicles, not operating businesses. And MSCI traditionally excludes investment funds from its equity benchmarks.

However, many affected firms argue this logic misses the point. They say they are operational companies, using bitcoin as part of a long-term financial and product strategy—not simply as a speculative holding.

The debate highlights a deeper question:
👉 Where should the line be drawn between an operating company and a crypto-backed investment vehicle?

Strategy (Formerly MicroStrategy) at the Center of the Storm

The most prominent name at risk is Strategy, formerly known as MicroStrategy.

  • The company’s shares surged over 3,000% after it began aggressively buying bitcoin in 2020.
  • In 2025 alone, the stock is down roughly 43%, reflecting the broader crypto downturn.
  • Analysts estimate Strategy could face:
    • $2.8 billion in outflows if excluded by MSCI alone
    • Up to $8.8–$9 billion if other index providers follow suit

Passive asset managers are estimated to own as much as 30% of large-cap free float, meaning index removal can cause immediate and unavoidable selling pressure.

Domino Effect: Other Index Providers May Follow

Market analysts believe MSCI’s decision could set a precedent.

“The conversation already extends beyond just MSCI… to the eligibility of digital asset treasury companies in equity indexes in general.”
— Kaasha Saini, Head of Index Strategy at Jefferies

If MSCI moves forward, pressure may mount on:

  • Nasdaq
  • LSEG (Russell indexes)
  • CRSP

Even though Strategy remains in the Nasdaq 100 for now, future rebalances could look very different.

A $15 Trillion Question for Passive Investing

In a public letter to MSCI, Strategy executives warned that excluding digital asset treasury (DAT) companies would effectively shut them out of the $15 trillion passive investment universe.

Their argument:

  • Higher cost of capital

  • Reduced access to long-term institutional flows

  • Structural disadvantage compared to traditional corporates

This is especially concerning because many bitcoin-buying firms fund crypto purchases by issuing equity—a model that becomes far less viable without index inclusion.

The Broader “Treasury Company” Craze

The trend extends well beyond Strategy:

  • As of September 2025:
    • 200+ digital asset treasury companies
    • Combined market cap of ~$150 billion
    • More than 3x growth year-over-year

  • Some firms are now trading below the net asset value (NAV) of their crypto holdings as prices fall

MSCI’s preliminary list includes 38 companies at risk of exclusion, including France-based Capital B.

What This Means for Investors and the Crypto Market

Short-term impact

  • Increased volatility in affected stocks
  • Forced selling from index-tracking funds
  • Higher funding costs for crypto-heavy companies

Long-term implications

  • A clearer regulatory and structural distinction between:
    • Operating companies using crypto strategically
    • Quasi-investment vehicles holding digital assets
  • Possible evolution of new index categories tailored to crypto-native firms

Final Thoughts

The proposed MSCI rule change marks a critical moment for bitcoin treasury companies. What began as an innovative capital strategy may now face institutional limits—testing whether these firms can thrive without the safety net of passive investment flows.

Whether this move ultimately “chills” the industry or forces it to mature remains to be seen. But one thing is clear:
The era of easy index inclusion for crypto-heavy companies may be coming to an end.

Reference