Key Takeaways
- Strategy opposes MSCI’s proposal to exclude companies with large Bitcoin holdings from key investment indexes.
- The proposal’s exclusion could lead to large-scale liquidations and may conflict with current US digital asset policies.
Strategy has submitted a comment letter to the MSCI Equity Index Committee urging it to drop a proposal that would exclude companies with digital asset holdings accounting for 50% or more of total assets.
The letter, delivered by the company’s executive chairman, Michael Saylor, and CEO Phong LE, argues that digital asset treasury companies, or DATs, are not investment funds. They are operating businesses that actively use Bitcoin to create shareholder value.
Strategy says that it runs an enterprise analytics software business, with investors buying into its management and strategy rather than a simple Bitcoin proxy.
The company claims that implementing the proposal’s 50% threshold is discriminatory and arbitrary as it singles out digital asset businesses while leaving untouched companies in other industries with similarly concentrated holdings in oil, timber, gold, media and entertainment, and real estate.
Strategy believes such a move would disrupt market stability. The leading corporate holder of Bitcoin is urging MSCI to consider DATs as operating entities contributing to economic progression and innovation.
Moreover, the proposal is believed to conflict with US policy.
Strategy notes that President Trump signed an executive order to promote the growth of digital financial technology. The administration also formed a Strategic Bitcoin Reserve and promoted the inclusion of digital assets in 401(k)s.
Analysts have estimated that Strategy could see up to $2.8 billion of its stock liquidated under MSCI’s proposal. The company was added to MSCI’s indices in May 2024 and has been included for approximately a year and a half.
Source: https://cryptobriefing.com/msci-bitcoin-heavy-firms-strategy/
