• MicroStrategy’s letter highlights that digital asset treasuries actively manage operations, like issuing Bitcoin-backed credit, unlike passive funds.

• The policy could unfairly bias indexes against crypto, treating it differently from single-asset sectors like real estate or oil.

• As of now, MicroStrategy holds 660,624 BTC, but critics warn of volatility risks and potential market selling pressure if the change takes effect in January 2026.

Discover MicroStrategy’s pushback against MSCI’s crypto exclusion policy. Learn risks, arguments, and impacts on Bitcoin holders. Stay informed on digital asset treasury regulations today!

What is MicroStrategy’s Feedback on the MSCI Policy Change?

MicroStrategy’s feedback on the MSCI policy change emphasizes that digital asset treasury companies function as operating entities capable of strategic adjustments, not just static holdings. In a letter submitted to MSCI on Wednesday, the company, the largest Bitcoin treasury holder, contested the proposed rule excluding firms with 50% or more crypto on balance sheets from index inclusion. This stance positions these businesses as innovative players in the financial landscape, backed by examples like their Bitcoin-backed credit instruments.

The feedback argues this exclusion would undermine MSCI’s neutrality toward asset classes, potentially conflicting with broader U.S. goals for crypto leadership under President Donald Trump. MicroStrategy points out inconsistencies, noting MSCI includes single-asset focused businesses such as real estate investment trusts and oil firms without similar restrictions.

What Risks Do Crypto Treasury Companies Pose to Stock Indexes?

Crypto treasury companies may introduce systemic risks due to their heavy reliance on volatile digital assets, according to MSCI’s rationale. These firms often resemble investment funds more than traditional operators producing goods or services, complicating valuation and accounting standards. For instance, uniform methods for assessing cryptocurrency holdings remain elusive, which could distort index performance and mislead investors.

MSCI’s analysis highlights how such inclusions might amplify market correlations, where index fluctuations mirror crypto’s highs and lows rather than broader economic indicators. A Federal Reserve paper underscores this by comparing Bitcoin and Ether volatility to stock indexes, oil, and gold, showing crypto’s extreme swings—exacerbated by common leverage practices among traders. MicroStrategy’s own stock has declined over 50% in the past year, per Yahoo Finance data, while its 660,624 BTC holdings reflect Bitcoin’s 15% drop from its early 2025 peak above $109,000.

Experts like those from the Federal Reserve warn that this fragility could lead to spillover effects, heightening overall index volatility. Implementing the policy in January 2026 might force divestitures, adding selling pressure to crypto markets and further destabilizing prices. Strive, another firm, has echoed calls for MSCI to rethink what it deems an “unworkable” blacklist on Bitcoin-focused companies, emphasizing the need for equitable treatment across asset classes.

The first page of MicroStrategy’s letter to the MSCI pushes back against the proposed eligibility criteria change. Source: MicroStrategy

The letter from MicroStrategy further illustrates that many financial institutions specialize in single-asset types, packaging derivatives like residential mortgage-backed securities without facing exclusion. This parallel suggests the policy change singles out crypto unfairly, potentially hindering innovation in digital asset strategies.

Bitcoin and Ether volatility compared to stock indexes, oil and gold. Source: The Federal Reserve

Critics maintain that while MicroStrategy’s arguments promote inclusion, the inherent risks—from leverage-induced fragility to valuation challenges—necessitate caution. The Federal Reserve’s insights reinforce that crypto’s volatility, far exceeding traditional assets, could cascade into broader financial stability concerns if indexes absorb these companies unchecked.

Frequently Asked Questions

Why is MicroStrategy opposing the MSCI policy on digital asset treasuries?

MicroStrategy opposes the MSCI policy because it views digital asset treasury companies as active operators that innovate, such as through Bitcoin-backed lending, rather than passive investors. The firm argues this exclusion biases indexes against crypto and ignores precedents with other single-asset businesses, potentially undermining U.S. crypto leadership goals.

How might MSCI’s crypto exclusion affect Bitcoin prices?

MSCI’s proposed exclusion could pressure Bitcoin prices downward if treasury companies like MicroStrategy sell holdings to qualify for indexes, creating market sell-offs. With Bitcoin already 15% below its 2025 high, this added volatility from divestitures might amplify declines, though underlying asset performance has outpaced related stocks.

Key Takeaways

• Operating vs. Investing: MicroStrategy asserts digital asset treasuries are operational businesses, citing credit products as proof against MSCI’s fund-like classification.
• Volatility Concerns: Federal Reserve data shows crypto’s swings exceed stocks and commodities, risking index stability and investor confidence.
• Policy Impact: The January 2026 change may spur crypto sales, but rethinking it could foster neutral inclusion aligning with global crypto ambitions.

Conclusion

MicroStrategy’s feedback on the MSCI policy change spotlights the tension between innovation in crypto treasury companies and the risks of their index inclusion, from valuation hurdles to amplified volatility. As MSCI weighs these factors, the decision could shape crypto’s role in traditional finance, balancing neutrality with stability. Investors should monitor developments closely, as equitable policies may bolster the U.S. as a digital asset leader—consider diversifying portfolios amid potential market shifts.