MSCI exclusion could trigger up to $15B in outflows

Crypto-focused treasury companies could be forced to sell over $10 billion to keep their stocks in the MSCI Global Investable Market Indexes, as the group running it discusses removing them due to their affiliation with the currently bleeding crypto market.

In early October, a proposal by Morgan Stanley Capital International (MSCI) was made to exclude listed companies whose digital asset holdings account for 50% or more of total assets, provided their primary business is categorized as digital-asset treasury activity. 

Author of “Thank God for Bitcoin” and managing director of Bitcoin For Corporations, George Mekhail, predicted that $11.6 billion could leave the sector if MSCI proceeds.

MSCI’s consultation timeline and companies under review. MSCI first announced on October 10 it was extending its consultation on the proposed exclusion rule. The index provider said it would accept feedback through December 31, before publishing final conclusions on January 15 next year. Any changes would be implemented during the February 2026 Index Review.

MSCI preliminary exclusion list has 39 companies

A preliminary list released as part of the consultation mentions 39 companies under review, with eighteen of them having the highest probability to be removed. At the same time, 21 are non-constituents that would be blocked from future inclusion if the rule is adopted.

Some of the firms highlighted by the MSCI are Strategy, Sharplink Gaming, Riot Platforms, and Marathon Digital Holdings, all of which have built significant exposure to Bitcoin or other digital currencies through their balance sheets.

The companies are based in several jurisdictions, including the United States, which accounted for 24 names. Japan and China each have three companies on the list, while the United Kingdom and Sweden account for two each. Germany, France, Singapore, and Australia each have one company under review.

BitcoinForCorporations, a group formed to campaign against the proposal, said it based its $10 billion to $15 billion outflow estimate on a “verified preliminary list” of the 39 companies, which together have a float-adjusted market capitalization of $113 billion.

The group also cited a JPMorgan analysis, which showed Michael Saylor-led Strategy alone could face $2.8 billion in outflows if it were removed from MSCI indexes. The business intelligence-driven Bitcoin holding company would take 74.5% of the total, float-adjusted market capitalization.

Industry sends letter claiming classification methodology is erroneous

BitcoinForCorporations, joined by Strategy and other Nasdaq-listed firms, have been pushing a message of opposition to the proposal. The group’s petition letter against the changes had gathered 1,268 signatures at the time of this reporting.

In a formal submission to MSCI’s Index Policy Committee, the group and its member companies explained three structural flaws in the plan that inscrutably discussed corporate classification and index construction.

The first criticism hailed from how MSCI defines a company’s primary business, which it said was determined by its operations, including revenue generation and earnings. The proposal would instead allow a single balance sheet item to override those factors.

According to the submission, this would enable the market value of digital assets to outweigh employees, customers, products, and revenue as the defining feature of a business. Companies could be recharacterized as fund-like entities purely due to treasury composition, even if their operating model is unchanged.

In their second objection, the rule only scrutinizes digital assets even though companies holding more than half of their assets in cash, real estate, commodities, equities, or goodwill are not facing any comparable reclassification risk.

BitcoinForCorporations said judging a company by a single balance sheet metric ignores whether it operates a real business with customers and revenue.

“A single balance sheet metric cannot reflect whether a company is an operating business. The rule would remove companies even when their customers, revenue, operations, and business model remain unchanged.”

Nasdaq-listed Strive urged MSCI to “let the market decide” whether bitcoin-holding companies belong in passive investment products on December 5. Strategy also submitted its own letter days later, propounding that the changes make MSCI biased against crypto as an asset class, and the index should be allowed to become a neutral arbiter.

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