Lead
Michael Saylor pushed back against warnings that his company, Strategy, could be excluded from MSCI and the Nasdaq 100 due to its large Bitcoin exposure. The response follows an October MSCI proposal to remove companies with more than 50% of assets in cryptocurrency from its indexes, and a JPMorgan estimate of up to $2.8 billion in potential market cap outflows if Strategy were excluded.
Key Developments
- In October, MSCI proposed revising its methodology to exclude companies whose assets are more than 50% in cryptocurrency, arguing such firms “resemble investment funds.”
- JPMorgan analysts noted this could put Strategy at risk of being dropped from MSCI indexes and potentially the Nasdaq 100, estimating an outflow of up to $2.8 billion from its capitalization in that scenario.
Saylor’s Response
Strategy’s head Michael Saylor rejected the classification implied by the MSCI proposal and the risk assessment. He argued the business does not fit the profile of a passive crypto vehicle:
“Strategy is not a fund, trust, or holding company, but a public company with a unique strategy of using Bitcoin as productive capital.”
Saylor added that the company does more than hold assets on its balance sheet, highlighting proprietary instruments including Stretch (STRC) that, he said, deliver returns to investors in dollars.
“No passive instrument or holding can do what we do,” Saylor emphasized.
Market Context
The discussion underscores a broader debate over how traditional equity indexes should treat companies with substantial cryptocurrency exposure. Methodology changes could affect index eligibility and the passive fund flows tied to benchmarks like MSCI and the Nasdaq 100. While analysts warn of possible pressure on firms heavily aligned with Bitcoin, Strategy maintains that its operating model and issuance of dollar-yielding instruments differentiate it from passive crypto holdings.
What’s Next
Market attention remains on MSCI’s final decision regarding index methodology. Any confirmed changes will help clarify potential implications for companies with significant Bitcoin allocations and determine whether Strategy’s index memberships face tangible risk.