MicroStrategy is objecting to Morgan Stanley Capital International's (MSCI) proposal to remove companies with significant Bitcoin weightings from major stock indices. The company argues that this rule unfairly equates them with investment funds.
This rebuttal came after JPMorgan noted that this move could trigger billions of dollars in forced sales. Thus, Strategy has positioned itself at the very center of a broader discussion on how to take positions in Bitcoin at an institutional level.
Strategy Defends Its Business Model
Strategy (formerly known as MicroStrategy) released a statement on Wednesday, arguing that MSCI's proposal contains a fundamental misunderstanding of how Bitcoin-intensive companies operate.
In a 12-page letter signed by Chairman Michael Saylor and President Phong Le, the company stated that it is an operating business and that it uses its Bitcoin reserves to issue credit instruments and raise capital.
The company emphasized that this approach is fundamentally different from structures designed to passively track a single asset.
In its letter, Strategy stated: 'We call on MSCI to reject this proposal. The offer is based on a widespread misrepresentation of DATs and is impractical, imposing arbitrary conditions that would stifle innovation, damage the reputation of MSCI indices, and contradict national priorities.'
Strategy also noted that the 50% digital asset threshold carries discrimination. The company argued that this rule targets it by excluding similarly concentrated oil or real estate sectors.
Consultation Risk for Bitcoin Treasuries
The discussion was ignited in October when MSCI launched a consultation on how digital asset treasuries (DAT) should be classified in its index methodology. The proposed 50% threshold brought Strategy and other Bitcoin-focused companies directly under scrutiny.
In November, according to JPMorgan's analysis, if Strategy were to be removed from the index alone, it could face nearly $2.8 billion in forced selling pressure, and if a similar approach were adopted by other providers, this amount could rise to $8 to $9 billion.
These predictions raised concerns in the public eye and led to a renewed discussion about the position of companies with Bitcoin treasuries in the index ecosystem.
For Strategy, the issue seems to extend beyond merely being included in the indices.
A delisting decision can reduce the company's liquidity and increase the cost of capital. It may also restrict the function of corporate treasuries as a channel for investors to take indirect Bitcoin positions.
In a broader context, this development raised the question for investors again: Should taking a position in Bitcoin primarily be through regulated exchange-traded funds, or should it proceed through publicly traded companies that hold digital assets on their balance sheets?
MSCI’s consultation process will remain open until December 31. Cryptocurrency market participants are eagerly awaiting the final decision to be made by the index provider.
