Strive Urges MSCI to Reassess Its Controversial Bitcoin Exclusion Policy

Summary:
Strive, a prominent Bitcoin treasury firm, is calling on MSCI to reevaluate a proposed policy that would exclude firms with significant Bitcoin holdings from its indexes. This move could negatively impact the visibility and investment opportunities for firms deeply involved in cryptocurrencies, particularly as they also expand into areas like artificial intelligence.

Key Takeaways

Strive has formally requested MSCI to reconsider excluding companies with over 50% of assets in Bitcoin from its indexes.
The proposed exclusion could severely impact digital asset treasury firms’ visibility and market cap.
Major Bitcoin miners are diversifying into AI, fueling concerns that exclusion may hinder investment in emerging tech sectors.
The volatility of Bitcoin complicates the practicality of a rigid asset threshold for index inclusion.

Strive urges MSCI to reconsider its controversial Bitcoin exclusion policy

Strive Pushes Back Against MSCI's Proposed Bitcoin Exclusion

Strive, ranked as the 14th-largest publicly-listed Bitcoin treasury firm on Nasdaq, has approached MSCI with a plea to reconsider its proposed policy of excluding major Bitcoin holding firms from its financial indexes. In a letter addressed to MSCI’s Chairman and CEO Henry Fernandez, Strive argued that excluding companies with Bitcoin holdings exceeding 50% of their total assets would ultimately limit passive investors' engagement with pivotal growth sectors.

The potential exclusion represents a serious risk for digital asset treasury firms, which could face decreased visibility in the market. Analysts from JPMorgan previously estimated that Strategy, a Bitcoin treasury firm listed in the MSCI World Index, could face a staggering loss of $2.8 billion if MSCI proceeds with this exclusion.

Strategy's chair, Michael Saylor, has confirmed that the firm is in discussions with MSCI regarding this pressing issue.

Bitcoin Miners Are Innovating in AI

Strive's CEO, Matt Cole, highlighted that major Bitcoin mining companies like MARA Holdings, Riot Platforms, and Hut 8—potential candidates for exclusion—are swiftly diversifying their operations to support artificial intelligence (AI) processes with necessary power and infrastructure.

Source: Matt Cole

Cole noted, “Many analysts suggest that the AI race is more constrained by power access than by semiconductor availability. Bitcoin miners are uniquely positioned to meet this surging demand.” He emphasized that even as AI revenues grow, their Bitcoin holdings will endure, and excluding these firms would limit client participation in one of the fastest-expanding sectors of the global economy.

The Rise of Bitcoin-Linked Financial Products

Cole argued that the proposed exclusion would also impact firms like Strategy and Metaplanet, which provide investors with similar products to structured notes tied to Bitcoin’s performance—services also offered by financial giants such as JPMorgan, Morgan Stanley, and Goldman Sachs.

“Bitcoin structured finance is a legitimate business for us just as it is for traditional banks,” Cole asserted. “Like other Bitcoin enterprises, we are transparent about our goal to center our operations around this vertical. Competing against conventional financiers is becoming unbalanced due to the additional cost burdens imposed by passive index providers penalizing the very Bitcoins that fuel our innovations.”

Concerns Over the Feasibility of a Strict Bitcoin Threshold

Cole pointed out that linking index inclusion to a volatile asset like Bitcoin may turn out to be impractical. Firms with Bitcoin exposure may frequently fluctuate in and out of index eligibility, driving up management costs and creating tracking discrepancies.

The difficulty of accurately measuring a company’s digital asset holdings, given their varied exposure methods, adds to the proposed policy’s complications. “The concern is real. Trump Media & Technology Group Corp., which holds the tenth-largest public Bitcoin treasury, was not included in your initial exclusion list because its Bitcoin holdings amounted to just under 50% of total assets,” Cole explained.

“What makes the exclusion problematic is that Trump Media is exploring significant digital asset exposure through derivatives and ETFs, which is not accounted for in the current framework.”

Instead of a sweeping exclusion, Strive proposes the creation of an “ex-digital asset treasury” variant for MSCI’s established indexes. “Investors wanting to avoid these companies could choose these specialized benchmarks, while others could continue using the standard indices that effectively represent the complete investable equity universe.”

Related Impact

Strategy’s Michael Saylor on the Potential MSCI Exclusion: “We’re engaging with MSCI on this critical issue.”

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