MSCI finalizes index rules that put Strategy, crypto treasury firms at risk of exclusion

MSCI’s New Index Rules and Their Impact on Crypto‑Treasury Firms

MSCI has released the final version of its revised index methodology, introducing stricter criteria for what it classifies as a non‑operating company. The changes are set to take effect later this year, and the firm has indicated that a shortlist of affected entities will be published on November 11. Among the names flagged are several crypto‑treasury and strategy firms that rely heavily on digital‑asset holdings, raising concerns about their continued inclusion in MSCI‑tracked benchmarks.

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What the New Rules Entail

MSCI’s updated framework expands the definition of non‑operating companies to include firms whose primary assets are cash, liquid securities, or other financial instruments rather than active business operations. The key elements of the rule are:

1. Revenue Threshold – Companies must generate a minimum proportion of revenue from operating activities, not just from investment returns.
2. Asset Composition – A high concentration of cash‑equivalent or marketable‑security holdings can trigger exclusion, even if the firm is publicly listed.
3. Governance Review – MSCI will assess whether a company’s governance structure reflects an operating business model, with particular attention to board composition and strategic direction.

These criteria aim to improve the relevance of MSCI indexes for investors seeking exposure to companies that are actively producing goods or services, rather than merely holding financial assets.

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Crypto‑Focused Firms at Risk

The initial list of firms under review includes Strategy, Metaplanet, and SharpLink—all of which manage sizable crypto‑treasury balances and provide strategic services to the broader digital‑asset ecosystem. While each company differs in its business model, they share a common reliance on crypto holdings as a core component of their balance sheets.

• Strategy operates as a crypto‑investment advisory platform, with a substantial portion of its assets held in Bitcoin, Ethereum and other major tokens.
• Metaplanet offers token‑staking services and generates revenue primarily from yield‑bearing crypto products.
• SharpLink provides liquidity‑provision and market‑making services, again with a balance sheet heavily weighted toward digital assets.

Because their operating revenues are relatively modest compared to the size of their crypto portfolios, these firms could be classified as non‑operating under MSCI’s new standards. If excluded, they would lose the visibility and passive‑investment inflows that come from being part of MSCI‑tracked funds.

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Potential Consequences for Investors and the Crypto Market

1. Reduced Index Exposure – Funds that track MSCI indexes may need to rebalance, potentially selling shares of the affected firms. This could lead to short‑term price pressure on the stocks.
2. Liquidity Implications – Lower demand from index‑based investors might affect the liquidity of these firms’ shares, making it harder for smaller investors to enter or exit positions.
3. Signal Effect – MSCI’s stance may be interpreted as a broader market signal that crypto‑centric business models are viewed as less sustainable from a traditional equity‑investment perspective.
4. Strategic Adjustments – Companies may consider diversifying revenue streams or restructuring to meet the operating‑revenue thresholds, prompting a shift in how crypto‑treasury firms present their business models.

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How Firms Can Respond

While the final list is not due until November 11, firms have a window to address the criteria:

• Revenue Diversification – Expanding services beyond pure treasury management, such as offering consulting, compliance, or technology solutions, can boost operating income.
• Transparency Enhancements – Providing clearer disclosures about how crypto assets support core business activities may help satisfy MSCI’s governance review.
• Engagement with MSCI – Direct dialogue with MSCI’s index committee can clarify expectations and potentially influence the final determination.

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Bottom Line

MSCI’s tightened index rules underscore a growing emphasis on operational substance over balance‑sheet size. Crypto‑treasury firms like Strategy, Metaplanet and SharpLink now face a tangible risk of exclusion, which could affect both their market perception and the broader flow of capital into the digital‑asset sector. Stakeholders should monitor the November 11 announcement closely and consider proactive steps to align with the new operating‑revenue standards.