MicroStrategy responded to the proposal from Morgan Stanley Capital International (MSCI) to remove companies with heavy exposure to Bitcoin from major stock indices, arguing that the rule incorrectly treated them as investment funds.
The response came after JPMorgan warned that the measure could trigger billion-dollar forced sales, placing Strategy at the center of a broader debate on how Bitcoin exposure should be handled in the public market.
The strategy defends its business model
Strategy (formerly MicroStrategy) issued a statement on Wednesday arguing that the MSCI proposal fundamentally misrepresented how companies with heavy Bitcoin exposure operate.
In a 12-page letter signed by chairman Michael Saylor and president Phong Le, the company claimed it is an operating business that uses its Bitcoin reserves to issue credit instruments and raise capital.
They emphasized that this approach fundamentally differs from a passive instrument designed to track a single asset.
“We urge MSCI to reject the proposal. It is based on a gross mischaracterization of digital asset treasuries (DATs) and would impose arbitrary, unworkable conditions that would stifle innovation, damage the reputation of MSCI's indices, and conflict with national priorities,” it stated.
Strategy also stated that the proposed 50% threshold requirement for digital assets was discriminatory. They believed the rule singled out the company, while other sectors with similar concentration, such as oil or real estate, were left unaffected.
Consultation puts Bitcoin holdings at risk.
The controversy began in October when MSCI opened a hearing on how to classify digital asset treasuries (DATs) in its index methodology. The proposed 50% requirement immediately placed Strategy and other Bitcoin-focused companies under scrutiny.
In November, an analysis from JPMorgan estimated that Strategy could face approximately $2.8 billion in forced selling pressure if MSCI removed the company alone, and potentially up to $8–9 billion if other providers followed the same approach.
These estimates led to increased public concern and renewed focus on how Bitcoin treasury companies should be classified in the index system.
For Strategy, the consequences extended beyond index eligibility.
Exclusion could reduce liquidity and increase the company's cost of capital. It could also limit the role of corporate balance sheets as a pathway for investors seeking indirect Bitcoin exposure.
For investors in general, this episode highlighted a structural question about whether Bitcoin exposure should primarily exist within regulated exchange-traded funds (ETFs) or continue to exist through publicly traded companies holding digital assets on their balance sheets.
MSCI's hearing is open until December 31, and market participants are closely watching as the index provider considers its final decision.
