Why Strategy May Be Removed From MSCI—and Its Plan to Fight Back

Strategy At The Crossroad

Strategy (MSTR -3.65%) (formerly MicroStrategy) is the most preeminent Bitcoin company, holding more than 3% of all Bitcoin that will ever be created.

This puts it in a special situation, where the fortunes or troubles of the company could impact the entire cryptocurrency market.

And there have been concerns about the future of the company, as its stock price has plummeted from its July 2025 highs, and that it could endanger its ability to pay back its debt and promised dividends.

In a worst-case scenario, this could trigger a “doom loop,” where a falling Bitcoin price forces liquidation by Strategy, which in turn forces Bitcoin prices lower, triggering more liquidation, and so on.

For this reason, Strategy has built a $1.44B USD Reserve for Bitcoin Risk, giving it 1-2 years of cash to buffer a temporary crash in Bitcoin prices and Strategy’s stock prices.

Still, this is not the only issue. At its core, Strategy’s stock is not a pure Bitcoin play, and for example, owners of the company’s perpetual preferred stock could go ahead of holders of ordinary shares in case of a liquidation.

Lastly, an imminent threat is looming over Strategy, which could trigger a lot of forced sales of its stock: the exclusion from the MSCI indexes.

MSCI Exclusion – Why Is It Happening?

As explained in greater detail in “MSCI Index Rules: The Risk Facing Strategy in 2026”, the very influential MSCI financial firm set the standard for more than 1,400+ equity indexes, which track MSCI indexes.

This means that being included or not in the MSCI indexes can radically change the amount of money flowing into a given company’s stock, directly affecting its stock prices, and, therefore, its ability to raise money.

Getting listed on the index can increase inflow by as much as 300% and prices by 2-3% on average.

MSCI is looking to implement a new rule that companies would have to match to fit into its indexes, which would stipulate that they own no more than 50% of their total assets as digital assets (like Bitcoin).

How Strategy Is Responding to the MSCI Exclusion Threat

As Strategy’s stock price is already under pressure, exclusion from the MSCI could be really detrimental to the company, coming at the wrong moment.

MSCI’s final decision will be taken in mid-January. This could be followed by an appeal process, and a period extending for as long as 90 days to allow for passive fund sales without forcing sales.

So even if Strategy is excluded, it will take until Spring 2026 to see the process directly impact the company.

While Strategy does not really have the final say in MSCI’s decision, it produced a long letter arguing against the idea, and in favor of  Digital Asset Treasury Companies (“DATs”), making quite a few arguments for its cause.

In Defense of DATs

The center of the company’s argument is that DATs are not investment funds, but operating companies, and should be treated as such.

The argument relies on the idea that Strategy and other DATs are making direct decisions regarding Bitcoin holdings, and are not bound to an investment profile like traditional funds.

“Strategy, unlike an investment fund, retains the operational flexibility to adapt its value-creation strategies as the revolutionary technology underlying Bitcoin evolves.

That operational flexibility is what Strategy’s investors value and is what distinguishes Strategy (and other DATs) from digital asset investment funds.”

Strategy points out that by providing access to Bitcoin in various forms, the company is providing a financial service, not much different from a bank or a fintech company.

It should, however, be noted that while this argument could help avoid delisting by the MSCI, it could one day be used against Strategy if it argues with the SEC that it should not be as tightly regulated as banks.

“Strategy uses proceeds from equity and debt financings driven by its Bitcoin treasury strategy to offer investors a range of digital credit and innovative securities, including both equity and fixed income instruments, that provide varying degrees of economic exposure to Bitcoin.”

Strategy also reminds MSCI that Bitcoin is classified as a commodity, not a security. So it could hardly be considered the same as a fund investing in securities.

Digital Versus Real Assets

Another part of the argument attacks the idea that this decision would treat digital assets differently from other assets.

MSCI routinely lists companies that hold only one type of asset and passively hold them while waiting for them to appreciate and generate revenues.

“Strategy and other DATs invest in a single asset class makes them no different from REITs or oil companies.

MSCI does not classify those businesses as investment funds, and DATs should be treated no differently.”

Here, the argument seems a little weaker, as oil or real estate assets tend to directly generate income, while Bitcoin and other digital assets do not. The same is true for funds holding U.S. Treasury or other bonds.

So while this does not directly justify excluding DATs, it can be argued that these companies have a different profile from other sector-focused investment companies like REITs.

However, this also means that MSCI is putting itself in the role of an arbitrator deciding that digital assets are radically different from other assets, including cash.

For example, as there is no rule that a company has to hold less than 50% of its assets in US dollars, the new rule distinguishes between Bitcoin and USD on an arbitrary basis.

“If implemented, however, the proposal would raise concerns about the neutrality of MSCI’s indices by creating a novel, digital asset-specific eligibility criterion that has no sound basis in MSCI’s historical indexing practices.

By discriminating against one asset type, the proposal would transform MSCI into an arbiter of investment decisions—creating confusion and undermining the representativeness and reliability of its indices.”

Worse, MSCI’s mandate is to represent market trends with its indexes, as neutrally as possible, and Strategy argues the new rule does just the opposite.

And far from reflecting the market, such a policy position would be contrary to market trends. Digital assets are increasingly important to the economy, with Bitcoin alone having a market cap of around $1.85 trillion, making it one of the world’s largest assets.

Arbitrary Threshold

A better point is made that the 50% threshold is arbitrary and will create a lot of confusion.

A change in accounting rules could warrant the delisting or relisting of a company suddenly. A change in digital assets’ value could also have the same results.

“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.”

The likely outcome will be rather chaotic acceptance and exclusion of companies holding digital assets, depending on price fluctuation or accounting standards.

Contradicting US Policy

Lastly, Strategy points out that actively attacking digital assets and the companies holding them contradict the role they are playing in the US financial system.

Digital assets are being touted as technological innovation and the next generation of financial tools by both the highest level of US political power and major financial firms, which, for example, pushed for the creation of Bitcoin ETFs.

“The Administration has thus undertaken multiple initiatives—including establishing a Strategic Bitcoin Reserve and promoting the inclusion of digital assets in 401(k)s—that promote the growth and adoption of digital assets.

At every turn, the Administration is treating digital assets as a matter of critical importance to the economy and national security, not as an ominous, disfavored technology.“

This part sounds not so much like a technical or legal argument than a political warning or a veiled threat.

It essentially states that MSCI might put itself in the target of the White House and the highest levels of the US political system if it were to go through with its decision to expel Strategy from its indexes.

“MSCI should not take such an economically damaging action—particularly at a time when the country faces so many other macroeconomic headwinds.”

Taking More Time

Lastly, Strategy requests a longer time for a decision to be taken, criticizing MSCI’s lack of explanation of a decision that seemingly came out of the blue.

“At a minimum, MSCI should not take such a consequential step without engaging in further consultation. When it announced the proposal, MSCI offered a few terse sentences that provided almost no explanation of the basis for the proposal.”

Indeed, it would seem reasonable that for a better understanding of which company could be exposed to such a ruling, the exact reasoning behind it is clarified.

“MSCI said, for example, that “some market participants noted that [DATs] may exhibit characteristics similar to investment funds”—but it did not explain which participants raised these concerns, or what characteristics they viewed as similar to investment funds.”

Conclusion

Many market participants seem to take the upcoming exclusion of Strategy from the MSCI as a given, and it is accurate.

However, this is not yet fully decided, and it is true that the decision from the MSCI came with significant shortcomings: lack of clarity, poorly explained justification, short deadline, and an apparent decision to single out digital assets.

As a result, Strategy might still have a case to if not avoid, at least delay the exclusion.

Overall, this is the latest episode in the complex issue of the regulatory handling of cryptocurrencies and digital assets. Previously, it was the SEC’s decision to consider them as securities or commodities. Today, it is the role they can play in a balance sheet and the place of DATs in global indexes.

So far, the history of Bitcoin tells us that more adoption and “mainstream” acceptance is the general trend. But it is often marked by months or years of regulatory uncertainty.

So it might be that while Strategy will ultimately be part of global indexes, it might as well be excluded from them for a little while, until a clearer decision framework emerges in the world of financial regulation.

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