MSCI Adopts Index Rules That Put Strategy at Risk

MSCI replaces crypto restrictions with financial screens

MSCI declined to implement its earlier digital asset treasury exclusion in January. That proposal focused on companies whose digital assets represented at least half of total assets.

It nevertheless retained interim restrictions on the preliminary company list, freezing increases in index share counts and inclusion factors and deferring additions and size migrations. It also promised a wider review of non-operating businesses.

January’s outcome therefore preserved membership subject to other requirements, without providing unrestricted treatment for future index changes. Thursday’s decision ends those interim measures with the November review and moves the companies into the broader framework.

Under the October methodology’s Appendix I, companies with operating assets of at least 50% of total assets pass the core screen. Companies below that level face five tests covering operating asset intensity, expenses, operating cash generation, fair-value movements and dependence on external capital.

Failing the initial asset test alone does not establish ineligibility. The exclusion screen requires failure on at least four of the five ratios.

Existing members generally must fail the core and exclusion screens in both of the two assessed annual filing periods before deletion. A prospective addition can be blocked by failure in either period. Interim filings may also be considered.

That difference gives existing constituents more protection against a single weak reporting period. The methodology also applies different ratio thresholds to existing and prospective members, making company-specific calculations essential.

Strategy and Metaplanet face a November index test

MSCI’s original consultation simulation, based on May 2026 data, identified Strategy, Metaplanet and uranium holder Yellow Cake as three deletions from the ACWI Investable Market Index. SharpLink appeared among three companies on a proposed watchlist.

Those were historical illustrations under the proposal. They cannot substitute for November’s final results, especially after MSCI adopted modifications and specified the final filing-period rules.

Yellow Cake’s appearance also shows that the proposed screen reached beyond crypto. The question is how a company’s operations compare with assets held for investment and the financing used to accumulate them.

The funding question is already visible in Metaplanet’s share buyback and convertible bond issuance. Index eligibility adds another consideration to decisions about share supply and access to capital, without determining the outcome of any individual financing.

Strategy’s consultation response argues that the operating versus non-operating distinction lacks a recognized accounting basis. The company says it reports its Bitcoin business as an operating segment under U.S. accounting standards, consistent with discussions with SEC staff.

That is Strategy’s position in a contested methodology debate. An accounting segment classification and an index provider’s eligibility definition serve different purposes; the former does not settle the latter automatically.

The company’s second-quarter results illustrate the financial distinction. Strategy reported an $8.22 billion net loss, primarily reflecting an $8.32 billion unrealized digital-asset loss, while its USD Reserve reached $3.75 billion.

It also reported $122.4 million of quarterly revenue, up 6.9% from a year earlier. That operating activity is part of the company’s argument for inclusion. However, the existence of revenue alone does not answer a screen that compares business activity with a much larger asset base.

As earlier coverage of those results explained, accounting losses and cash available for obligations are separate measures. MSCI’s framework examines several dimensions rather than treating a headline earnings loss as the sole eligibility test.

MSTR index risk concerns share demand, not a Bitcoin sale order

Strategy estimated in its consultation response that MSCI GIMI-linked funds held roughly 13 million shares, representing 3.1% of basic shares outstanding. It compared that position with about 60% of its 30-day average daily trading volume.

Those are the company’s consultation-period estimates. They are not an independently refreshed inventory, a forecast of same-day selling or evidence that an outflow has occurred.

If Strategy is removed, portfolios seeking to track the affected indexes would need to reflect the changed benchmark. The possible pressure is on demand for its shares. The amount and timing would depend on actual holdings and portfolio implementation.

The rule itself does not direct Strategy to dispose of Bitcoin, change its preferred-stock dividends or repay debt. Any link from index selling to treasury liquidation would require additional corporate decisions or financing pressures.

Strategy had already disclosed about $218.4 million of Bitcoin sales year to date in its July results to help fund preferred dividends. Those sales preceded the final index decision. They cannot be counted as liquidation caused by MSCI, and the July disclosure does not establish a new October sale.

That separation also applies to Strategy’s proposed daily preferred dividends: payment schedules and benchmark membership are different issues. Neither establishes the result of the other.

Alternative.me showed 63, or greed, versus 53 the previous day when checked at about 02:59 UTC October 16. The index measures broad crypto sentiment, not expected MSCI fund flows.

The next decisive disclosure is November 11’s final company list. MSCI’s review calendar gives December 1 as the effective date, corresponding to implementation at the November 30 close. Until the list and portfolio changes are known, Strategy’s inclusion outcome and any resulting sales remain unconfirmed.