MSCI Retains MicroStrategy, But Bitcoin Premium Controversy Continues

The MSCI's choice to keep Digital Asset Treasury Companies (DATCOs), including MicroStrategy, in its global equity indexes has eased worries about an imminent forced sell-off. However, this ruling has shifted the focus to a significant and growing debate: Should a company heavily invested in Bitcoin be seen as an operational business or as a leveraged investment vehicle posing as a traditional equity?

Key Takeaways

MSCI has decided to retain Digital Asset Treasury Companies like MicroStrategy in its global equity indexes, easing concerns about immediate sell-offs.
The decision has sparked ongoing debate about how Bitcoin-heavy companies like MicroStrategy should be classified—either as operational businesses or as leveraged investment vehicles.
Critics argue this ruling only delays necessary discussions around MicroStrategy's actual business model and valuation.
Institutional investors are concerned that some DATCOs resemble investment funds, prompting scrutiny from MSCI, which plans to consult further on the matter.
The MSCI decision limits the potential for future passive inflows into MicroStrategy's stock, as share count adjustments are restricted.

MSCI's Decision Eases Sell-Off Fears but Ignites Ongoing Debate About MicroStrategy

On Tuesday, MSCI announced it would not move forward with a proposal to exclude DATCOs from the MSCI Global Investable Market Indexes during the review scheduled for February 2026.

MSCI confirmed that Digital Asset Treasury Companies will remain included in its indexes for this upcoming review, a win for fair indexing practices and economic reality. "Thank you to our investors and the $BTC community," tweeted Strategy, MicroStrategy's corporate identity.

However, the index provider made it clear that the scrutiny remains ongoing. MSCI plans to conduct a broader consultation regarding "non-operating companies in general." Concerns were raised by institutional investors who noted that some DATCOs function more like investment funds rather than ordinary businesses.

For now, the DATCOs that remain in MSCI indexes will continue to do so, assuming they meet other eligibility requirements. Nonetheless, MSCI has imposed significant constraints that effectively freeze their index footprint, limiting potential passive inflows even if these companies issue new equity.

The announcement led to varying reactions across the markets. Strategy and Michael Saylor, the executive chair and former CEO of MicroStrategy, welcomed the decision, with Saylor stating, "MSTR will remain in MSCI indexes."

MicroStrategy emphasized that this is a positive outcome for neutral indexing and the economic landscape. Investor Zynx shared that earlier fears of a doom loop and significant stock sell-offs were exaggerated, suggesting, "We can move past this and continue building on a solid start to 2026."

Critics Claim MSCI Ruling Just Delays MicroStrategy's Judgment Day

Critics, however, contend that the MSCI decision only postpones a necessary reckoning. Analyst Andy Constan portrayed MicroStrategy as “a 1.27 times levered ETF trading at its NAV and paying 10% for its leverage.” He emphasized that the company “has no GAAP earnings,” lacks a valid reason for its valuation based on the price-to-earnings ratio, and should never have been added to the NDX 100, nor will it be added to the SPX or any “corporate” index.

Constan's statements indicate that MicroStrategy functions more like a high-risk, leveraged Bitcoin fund rather than a conventional company, which he believes can be misleading.

Moreover, concerns have also been raised regarding Strategy’s preferred equity offerings, specifically STRC. Analyst Novacula Occami criticized claims that these financial instruments constitute digital credit, asserting, “STRC is not even credit. It is equity that is subordinate to all creditors,” meaning holders have “no legal claim on any asset, including the revered BTC.” Occami also pointed out the absence of basic covenants in this structure, labeling it "just equity risk."

Even some optimistic observers recognize that the MSCI decision may be less favorable than initial reactions indicate. Analyst Finch remarked that the limitation on share count adjustments signifies “new issuance will no longer lead to increased passive buying from index rebalancing,” eliminating a vital boost for stocks like MSTR.

MSCI's own statements reinforce why the discussion remains unresolved. By voicing concerns that DATCOs may primarily be investment-oriented rather than operational, the index provider signals that the classification of Bitcoin-heavy companies is still under review. This means MicroStrategy's Bitcoin premium and its standing in the equity markets remain intact for now, but under vigilant scrutiny.