Key Highlights
- On January 6, global index provider MSCI Inc. reversed its plan to exclude Digital Asset Treasury Companies (DATCs), or firms holding over 50% of assets in crypto, from major indexes like the MSCI All Country World Index.
- The decision comes after intense backlash from companies like Strategy, which argued that the 50% threshold was discriminatory.
- This news sparked euphoria in the crypto community, which can boost institutional adoption of crypto assets.
On December 6, the global index giant MSCI Inc announced that it will not move forward with a controversial plan to remove certain crypto-focused companies from its most important stock indexes.
The decision will preserve the status for firms like Strategy that hold large amounts of Bitcoin and other cryptocurrencies on their balance sheets.
The proposal, first introduced in October 2025, sought to exclude a category of public companies labeled Digital Asset Treasury Companies, or DATCOs. MSCI had defined these as firms where cryptocurrencies make up 50% or more of their total assets. The plan aimed to reclassify these companies, which would have made them ineligible for inclusion in flagship indexes like the MSCI All Country World Index.
A Reprieve for Billions in Market Value
MSCI’s statement announcing the reversal stated the complexity of the issue. The company said that distinguishing between investment companies and other firms that hold digital assets as part of their main operations “requires further research and consultation.”
While halting the immediate exclusion plan, MSCI mentioned that it would conduct a detailed review of how indexes treat companies with large non-operating assets.
The market reaction to this news was quickly positive. Shares of Strategy jumped approximately 4% in after-hours trading following the announcement. The price of Bitcoin has also witnessed a momentum on an hourly chart with a small spike.
MSCI Takes U-turn after Backlash Over New Rule
The initial plan sparked a controversy and faced intense backlash from the affected companies and the crypto community. A preliminary guideline from MSCI identified 39 companies at risk of removal, with a combined market value exceeding $133 billion. Popular names on that list included Strategy and the Japanese firm Metaplanet.
The consultation period for the proposal was extended on December 31, and during that time, it faced letters of opposition and petitions gathering over 1,000 signatures. Strategy, led by chairman Michael Saylor, argued strongly against the previous guideline. In a December letter, the company stated that firms like his are legitimate operating businesses that use digital assets as strategic capital for their treasury, not as passive investment vehicles.
The letter reads: “The proposal’s 50% rule arbitrarily singles out digital asset businesses for uniquely unfavorable treatment, while leaving untouched businesses in other industries(such as oil, timber, gold, media and entertainment, and real estate) that have similarly concentrated holdings in a single asset type. And there is no way to implement the proposed 50% rule consistently or fairly. Asset price swings, changes in the application of accounting principles, and other factors relevant to balance sheet accounting would lead to index instability as DATs whipsaw on and off MSCI’s indices.”
“MSCI would need to develop novel metrics and methods for measuring balance sheet concentration and monitoring circumvention. Further, different accounting principles across asset classes and jurisdictions would lead to disparate indexing treatment based on the happenstance of what asset a company holds, what accounting principles apply to the asset, and where the company is located. MSCI should not implement a rule that will lead it to be constantly auditing companies under arbitrary, inconsistent, and evolving standards,” stated in the letter.
Some critics of the proposal, including advocacy group BitcoinForCorporations and investment manager Strive Asset Management, also affirmed that the new rule violated core principles of index neutrality.
They also pointed out that the arbitrary 50% threshold was unfairly applied only to digital assets, while companies holding large concentrations of commodities like gold or oil faced no such exclusion risk.
Also Read: David Sacks Meets Bipartisan Senators to Discuss Crypto Market Bill
Source: https://www.cryptonewsz.com/msci-not-to-exclude-bitcoin-treasury-company/
