Index provider MSCI has shelved a controversial plan that could have ejected crypto-heavy firms like Strategy Inc. from major indices. However, the firm signalled that a broader crackdown may be coming. Strategy Inc. holds over $US60 billion in bitcoin. MSCI stated it would maintain current index treatment for digital asset treasury companies, even those where crypto holdings exceed 50 per cent of total assets, meaning Strategy remains in global benchmarks. MSCI will launch a broader consultation on how non-operating companies should be treated.
Strategy Inc. is a company that acquires, holds, and eventually sells bitcoins. It also provides business intelligence, mobile software, and cloud-based services. Shares of Strategy rose around 5 per cent in after-market trading following the announcement. The stock has slumped almost 60 per cent in the past year.
MSCI stated that feedback from its consultation highlighted investor unease that some digital asset treasury companies share characteristics with investment funds. Distinguishing between investment companies and other companies that hold non-operating assets requires further research and consultation with market participants, according to MSCI. The index provider suggested assessing index eligibility across a range of these entities may require additional inclusion assessment criteria, such as financial-statement-based or other indicators.
