- BFC argues MSCI misclassifies Bitcoin-heavy operating companies.
- Strive warns that the MSCI proposal could distort index consistency.
- The MSCI decision is expected on January 15, influencing treasury firms.
Bitcoin For Corporations has opposed MSCI’s proposal to exclude companies with large bitcoin holdings from global equity indexes. The plan applies to companies with digital assets that constitute more than half of their business assets, a criterion that critics argue misstates the actual businesses. The contention has escalated, with industry leaders cautioning that the policy might redefine how public companies incorporate bitcoin in their operations.
Industry groups push back against MSCI proposal criteria
Bitcoin For Corporations suggested that the new rule will just move MSCI away from its old business model of sorting companies by their operations rather than their balance sheet structure. The group claimed that the switch would have a disproportionate impact on the companies that utilize bitcoin as a component of shareholder-adopted treasury plans.
BFC managing director, George Mekhail, stated that MSCI has traditionally described companies in terms of what they do. He pointed out that the new method isolates one category of assets but leaves other categories, such as oil or gold deposits of energy and mining companies, alone.
BFC also emphasized structural problems. It cautioned that index eligibility based on movements in volatile market prices could lead to unforeseen changes in the index’s membership. The coalition contended that such changes would not deliver performance, business model, or long-term value.
The group also warned that the proposal would lead to passive outflows of funds, capital costs, and volatility among Bitcoin treasury companies. BFC also encouraged MSCI to remove the threshold and have an operations-focused approach.
Efforts and treasury firms are alert to market distortions
There were also concerns about Strive Asset Management. In a letter to MSCI CEO Henry Fernandez, the company wrote that the 50% threshold is too wide and yields uneven results when applied to varying accounting standards. Strive, one of the largest corporate owners of bitcoin, stated that numerous companies with significant bitcoin assets operate businesses in fields such as AI, data centers, and cloud infrastructure.
The executives referred to the proposal as the way MSCI handles other commodities. They added that energy companies with massive unexploited reserves will be given a free pass; in contrast, bitcoin holdings receive special treatment despite being of the same quality as a value holder.
MSCI decision could impact U.S. firms’ Bitcoin strategies
The company also stated that tough regulations would cause innovation to move to other countries where competition is not in the United States, giving non-U.S. competitors the advantage of flexible rules. This, they cautioned, can be a disadvantage to U.S.-listed companies that seek bitcoin-backed strategies.
Some of the companies most impacted include Strategy, a technology company that operates a high-profile program on Bitcoin Reserve. Chairman Michael Saylor has, of late, quashed claims of possible index exclusion, noting that Strategy has a large software division and a multibillion-dollar bitcoin-backed credit program.
He cited items such as Stretch, a credit instrument backed by Bitcoin, as an indication that Strategy is not just a holding company. MSCI is to issue its final decision on January 15, which may affect the utilization of bitcoin as a treasury asset.
