A possible move by indexing giant MSCI to exclude crypto treasury companies from its widely followed indexes is drawing fierce backlash from the industry.
MSCI is considering excluding companies that have 50% or more of their assets invested in bitcoin or other cryptocurrencies. The index provider announced the plans in October, with a decision on the move potentially to come in January.
MSCI argues that crypto treasury companies are more like investment funds than operating companies. The idea has drawn opposition from Michael Saylor’s Strategy, as well as Viek Ramaswamy’s Strive Asset Management.
Bitcoin prices have been volatile lately, with the potential for fresh struggles among companies that accumulate crypto being eyed as another headwind for the market.
Crypto market players told Business Insider they see MSCI’s move as a mistake.
Adam Levine, CEO of digital asset infrastructure firm Fireblocks, said that MSCI’s plan likely won’t play well with institutional investors that have warmed to digital assets in recent years, and who could be forced to rebalance their holdings that track the index.
“When major indexes leave out companies that work with digital assets in a meaningful way, they’re introducing the potential of missing key market players at a time when more businesses are innovating with stablecoins and tokenized equity,” he stated. “It’s equivalent to intentionally ignoring early internet companies 30 years ago.”
While the implications for DATs could be severe if MSCI decides to exclude them from its indexes, sources say bitcoin can still recover from its bear market.
Wojciech Kaszycki, chief strategy officer at blockchain infrastructure firm BTCS S.A., predicts that a bitcoin rebound is coming, and others say MSCI’s potential move has been baked into the market’s outlook already.
“Decisions by MSCI and other index providers have real implications for digital asset treasuries and, by extension, the underlying crypto they hold,” said Spencer Hallarn, head of OTC trading at crypto market maker GSR. “That said, this potential move has been well telegraphed, so it’s reasonable to assume the market has already priced it in and that it’s unlikely to come as a surprise.”
