MSCI extends reprieve for crypto companies like Strategy in its global indices

Under regulatory pressure, MSCI made a decisive choice. The index issuer announced on January 6 that it would keep companies with high crypto cash flow in its global indices. A temporary decision, while the status of these companies, including Strategy, remained uncertain. This signal stabilizes their exposure in institutional portfolios and extends their integration into traditional markets, at a time when the gap between traditional finance and cryptos continues to narrow.

MSCI maintains DATCOs in its indices: a status quo under surveillance

In a note published this Tuesday, MSCI (Morgan Stanley Capital International) announced that it will not, at this stage, remove Digital Asset Treasury Companies (DATCO) from its global stock indices, while Strategy had escaped exclusion during the first sorting of the Nasdaq 100 last December.

Such an announcement made following a series of returns from institutional investors concerned about the consequences of such exclusion. “ This decision follows investor feedback and is part of a broader analysis aimed at differentiating investment companies from companies whose cryptos are an integral part of their operations“, has specified MSCI.

In addition, it particularly concerns companies like Strategy, whose strategy is largely based on the accumulation of bitcoin.

Here is the key elements of this MSCI decision:

• The maintenance of DATCOs in the MSCI global indices, despite internal debates on their real economic status;

• The definition criterion: a DATCO is a company whose cryptos represent 50% or more of all assets on the balance sheet;

• The main reason: feedback from investors who expressed concerns about premature exclusion, likely to lead to undesired market effects;

• The immediate effect: the companies concerned remain eligible for passive capital flows, in particular via index funds (ETFs) based on MSCI indices;

• A wider consultation will be organized to clarify the exclusion criteria in the future, in particular regarding so-called companies“non-operational”.

This choice therefore allows, for the moment, companies with high exposure to cryptos to maintain their attractiveness to institutional investors, while avoiding massive outflows of passive capital.

This is not a final approval, but a conditional status quo, pending a structural reassessment of the methodology for including companies in the MSCI indices.

Markets relieved, but an equation far from resolved

This decision, although technical in appearance, generated an immediate reaction on the financial markets. Strategy (MSTR) stock pricestrongly correlated with the evolution of bitcoin, first fell by 4.1% during the session on Tuesday, before rebounding by 5%.

This turnaround suggests that investors anticipated a possible exclusion of the company from MSCI indices, and that the final decision was seen as a positive signal of stability. Indeed, an exit from the indices could have led to an automatic reduction in the holding of MSTR shares by many passive funds, causing a massive disengagement of institutional capital.

MSCI said it will soon conduct a broader review of its methodology regarding non-operating companies. This is therefore not a definitive blank check for DATCOs. The distinction between disguised investment companies and companies truly active in the crypto economy remains to be refined. This position suggests that the status quo could be challenged during this year, after an overhaul of the inclusion criteria.

Beyond the Strategy episode, this decision by MSCI highlights an inflection point in the integration of cryptos into traditional finance. The temporary retention of DATCOs in the indices marks a reprieve, but raises crucial questions: to what extent is the holding of cryptos compatible with the structural requirements of the benchmark indices? And at what point does a business cease to be operational and become a simple investment vehicle?

Strategy revives Bitcoin purchases despite record loss of $17 billion. This choice, in the midst of a revision of the MSCI indices, illustrates the persistent tension between crypto conviction and institutional constraints. MSCI's decision leaves open the question of the status of these hybrid companies, at a time when the line between strategic reserves and speculation is disappearing.