Key Takeaways
The world’s largest publicly listed corporate bitcoin owner could lose its place in major indexes.Funds that copy those benchmarks would drop the stock from portfolios.MSCI expects to publish its consultation results by mid-October.
Strategy Pushes Back Against Its Own Index Provider
Strategy Inc. (Nasdaq: MSTR) issued a public rebuttal to MSCI on Aug. 14, after the index provider opened a consultation this month that would strike the largest corporate bitcoin holder from its global equity benchmarks. Funds that track those benchmarks adjust holdings to match them, which converts an eligibility rule into automatic portfolio changes.
“Digital assets are assets,” the company wrote on X, arguing that index providers should measure markets rather than determine which assets companies may hold. Strategy said MSCI’s proposal is out of step with regulators, markets and customers, adding that neither Bitcoin nor the company depends on the index provider.
Under MSCI’s consultation, the index provider proposes a two-step test for what it labels non-operating companies, firms whose value grows through assets on the balance sheet rather than revenue from a business. An issuer clears the first step when operating assets account for more than half of total assets.
How MSCI’s New Screen Catches Bitcoin Treasuries
Issuers that fail that core test then face an exclusion screen of five financial ratios spanning operating asset intensity, expense intensity, operating cash flow, fair value intensity and capital dependence. Four flags across those five render a company ineligible for the Global Investable Market Indexes.
The proposal applies gentler thresholds to current constituents than to outside candidates, starting with operating assets under 10% of the balance sheet and operating expenses under 5% of assets. Negative operating cash flow, outsized non-operating fair value swings weighed against both assets and revenue, and financing cash flow above 30% of assets alongside filings that document external funding for asset purchases complete the set.
Constituents additionally need two consecutive annual failures before deletion, while newcomers become ineligible on a single filing. MSCI keeps the pace slow to limit turnover, so a one-off miss leaves an index seat intact.
Which Companies Sit on the Deletion List
MSCI’s simulation using the MSCI All Country World Investable Market Index (ACWI IMI) identified three companies for removal as of May. Strategy was the only large-cap company among them, with a float-adjusted market value of $23.93 billion.
London-listed uranium holder Yellow Cake trails at $1.81 billion, with Tokyo-listed Metaplanet at $654 million, both classified as small-cap. Separately, Metaplanet held roughly 43,000 BTC at the end of the second quarter and leans on that treasury for credit.
Three additional names go onto a new public watchlist: Taiwan’s Center Laboratories at $673 million, Turkey’s Lydia Holding at $319 million, and ether treasury company SharpLink at $165 million. Yellow Cake stores physical uranium rather than tokens, evidence that the screen extends past digital assets.
The Rule MSCI Already Abandoned Once
MSCI’s earlier attempt singled out digital asset treasury companies, defined as issuers with half or more of total assets in crypto, and it named 39 candidates. Executive Chairman Michael Saylor and Chief Executive Officer Phong Le signed a December letter branding the threshold discriminatory, arbitrary, and unworkable.
That proposal was shelved on Jan. 6, and MSCI promised a wider review of non-operating issuers. Its replacement carries no crypto threshold, yet it reaches Strategy through the mechanics of a treasury model that raises equity and debt to accumulate bitcoin.
As of its latest disclosure, Strategy owned 840,447 BTC, having bought roughly 175,000 coins this year against about 7,000 sold. Le has signaled a return to purchases later this year.
What Index Removal Would Cost Shareholders
Passive money follows index membership, so a deletion would require tracker funds to sell or otherwise rebalance their exposure to the stock. JPMorgan analysts pegged about $2.8 billion in outflows if Strategy exited MSCI’s benchmarks, an estimate built against the withdrawn 2025 proposal rather than the current one.
Shares in Strategy trade near the value of its bitcoin holdings, with mNAV near 1x on Aug. 14, according to the company’s dashboard. The metric gauges the company’s valuation relative to its treasury reserves. That narrow premium leaves shareholders with limited valuation protection if index-tracking funds become forced sellers. It also indicates that investors assign little additional value to Strategy’s borrowing capacity, capital-raising strategy and corporate structure beyond its underlying bitcoin holdings.
Additionally, spot bitcoin ETFs deliver near-par exposure without a corporate balance sheet in between, which narrows the premium argument for treasury equities. Investors can obtain bitcoin price exposure without assuming Strategy-specific risks tied to debt, preferred-stock obligations, equity dilution, management decisions or index eligibility. That alternative may constrain the premium investors will pay for Strategy, particularly when a potential benchmark deletion creates an additional source of selling pressure.
Feedback closes Sept. 30, results arrive by Oct. 16, and any adopted change lands at the November 2026 Index Review. MSCI notes the consultation may or may not lead to any change, and watchlist names stay in the index until a second consecutive failure, putting Center Laboratories, Lydia Holding and SharpLink in front of the same test next year.
