MSCI is consulting on a proposal to exclude “non-operating companies” from its global market indexes, a change that would remove bitcoin treasury giant Strategy.
With it, ETF and index fund investors tracking the MSCI global market indexes could stand to lose the indirect bitcoin exposure they currently hold without realising it.
The proposed rule would bring in financial ratio tests to flag companies that act more like investment vehicles than operating businesses. If passed, it would remove bitcoin treasury companies Strategy and Metaplanet, along with uranium holding company Yellow Cake.
Under the screening methodology, companies would first go through a core screen checking whether operating assets make up more than half their balance sheet, according to financial reports. They would then go through an exclusion screen covering five ratios: operating asset intensity, expense intensity, cash flow, fair value intensity and capital dependence.
A company would then be ineligible for index inclusion if it failed at least four of those five ratios.
Applying the framework to MSCI’s ACWI IMI Index — which captures large, mid and small-cap representation across developed and emerging markets — would have resulted in three deletions as of May 2026.
The largest of the three is US-based Strategy, the world’s largest bitcoin treasury company, which would fail the exclusion criteria because it primarily raises equity and debt to accumulate bitcoin rather than to fund its software operations. Tokyo-listed bitcoin treasury firm Metaplanet would suffer the same fate, as would uranium holding company Yellow Cake.
Three smaller firms — Center Laboratories, Lydia Holding and Sharplink — would also land on a “watchlist” and be removed if they failed the screen again the following year.
MSCI is inviting feedback through 30 September, with results expected by 16 October and any changes implemented as part of the November 2026 Index Review.
For passive investors, the practical effect is straightforward: money that tracks MSCI’s benchmarks would no longer have indirect exposure to Strategy’s bitcoin holdings, narrowing one of the more popular routes used by investors to gain crypto-adjacent exposure without buying bitcoin directly.
Speaking to Investor Daily, ETF Shares’ chief investment officer David Tuckwell said the additional screening seems “pretty reasonable”.
“ETFs and closed-ended funds have never been allowed in the index. So why should companies that are functionally indistinguishable from closed-ended funds and ETFs be allowed in?”
He added that while bitcoin treasury firms were “absolutely a catalyst” for the proposed changes, it’s worth remembering that MSCI acts on client feedback. Given that asset managers are MSCI’s core client base, he said it’s quite possible the push to remove such companies came from them.
“The originator is unlikely to be MSCI itself. What has probably happened is that MSCI’s major clients – BlackRock, Deutsche Bank, global pension funds, the institutions that send money after MSCI’s indexes – don’t want retirees’ life savings propping up these bitcoin treasury companies.
“Many are under best-interest duties that effectively compel them to act. And it’s not exclusively about bitcoin. Looking at MSCI’s list of companies slated for removal, Yellow Cake is on the list, and it has nothing to do with bitcoin. It just passively holds uranium (“yellowcake,” as it’s known).”
Strategy’s response
Since index-tracking funds worth trillions of dollars must match their holdings to the indexes, MSCI eligibility changes can trigger forced buying or selling. This means forced selling of excluded companies is likely to follow if these changes go through.
Responding to MSCI’s proposed changes on X, Strategy’s company page said index providers should measure markets rather than dictating which assets public companies can own.
“Digital assets are assets. Index providers should measure markets, not decide which assets companies are allowed to own. MSCI’s proposal puts it out of step with regulators, markets, and its own customers. Bitcoin doesn’t need MSCI. Neither does Strategy,” it wrote.
Given that the company is the world’s largest institutional holder of bitcoin, Tuckwell admitted the bitcoin price “could be impacted” if MSCI proceeds. That comes as bitcoin has already been suffering through a challenging year, with the cryptocurrency trading around US$63,000 as of 16 August.
However, he said that bitcoin is arguably facing bigger problems right now, including what he called the “existential threat” of quantum computing, which he believes could undermine its blockchain entirely.
“[And] if Strategy’s business model rests on hoovering up passive capital from index-linked assets and simply buying bitcoin with it, you have to ask bluntly: what social purpose does this company serve?”