MicroStrategy (MSTR) rallied 6% on Wednesday after MSCI confirmed it will keep “digital asset treasury companies” (DATCOs) in its indexes — but the index provider also introduced a change that could blunt a major funding channel for crypto-heavy firms. What MSCI said In a Jan. 6 update, MSCI announced it will not move forward with a proposal to remove DATCOs from the MSCI Global Investable Market Indexes during its February 2026 review. That means companies that hold 50% or more of their assets in digital currencies will remain classified as DATCOs and keep their current index designations. The catch: passive demand removed MSCI simultaneously changed how it treats share issuance by these firms. Previously, when a company like MicroStrategy issued new shares, MSCI would increase the company’s index share count — forcing index-tracking funds to buy a slice of the new issuance. Analysts at Bull Theory say that requirement effectively created automatic demand: index funds typically needed to acquire roughly 10% of a new share issue. As an example, if MicroStrategy issued 20 million shares at $300, index funds would have to buy about $600 million of those shares — helping the company raise cash it could use to buy more Bitcoin. Under the new rule, MSCI will no longer adjust index share counts upward for newly issued shares. That means index funds won’t be forced to buy those fresh shares, removing a predictable source of demand. MicroStrategy will now likely need to find private buyers for new equity, which could reduce the capital it raises and limit its ability to grow its Bitcoin treasury the way it has in the past. Market context and motivations Speculation that MSCI might exclude DATCOs had already unsettled markets; that worry contributed to a broad crypto pullback — including a selloff in Bitcoin — earlier in October. The Jan. 6 clarification removed the threat of delisting but introduced a structural change that many investors see as significant. Some market observers suspect strategic motives. Crypto Rover pointed to MSCI’s Morgan Stanley roots and noted that Morgan Stanley has filed for a spot Bitcoin and Solana ETF — putting it in direct competition with MicroStrategy as a vehicle for Bitcoin exposure. Because many investors use MicroStrategy stock as a way to passively hold Bitcoin, the new MSCI rule could reduce the attractiveness and practicality of dilutive issuances. Crypto Rover argues this dynamic may drive large investors from DATCOs toward ETFs, particularly if Morgan Stanley’s product draws big flows. What it means for MicroStrategy and the market - MicroStrategy remains in the indexes, which helped lift MSTR shares on the news. - But the removal of automatic index-driven demand for new shares makes equity dilution a less reliable way to fund further Bitcoin purchases. - The change could force treasury-focused firms to lean more on private placements or other funding methods — and may accelerate capital flows into ETF wrappers if they prove cheaper or more reliable for passive Bitcoin exposure. Price note At the time of writing, MSTR is trading around $166, recovering from a 16-month low of $150 hit last Friday. Bottom line MSCI’s decision preserves DATCO classification — a relief for MicroStrategy and similar firms — but its tweak to how new shares are treated removes a predictable buyer from the market. That trade-off could alter how treasury-focused crypto companies raise capital and how investors choose to gain exposure to Bitcoin going forward. Read more AI-generated news on: undefined/news

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