Strategy and bitcoin-buying firms face wider exclusion from stock indexes
Baku, December 22, AZERTAC
Michael Saylor's Strategy could soon be dropped from MSCI and potentially other major stock indexes, which analysts say could cost the bitcoin-hoarding giant up to $9 billion in demand for its shares and hurt the wider appeal of the sector, according to Reuters.
After queries from clients, MSCI in October proposed ditching from its global benchmarks companies whose digital asset holdings represent 50% or more of their total assets. It says they resemble investment funds, which it does not include in its benchmarks. But many such firms argue that they are operational companies developing novel products, and that MSCI's proposals unfairly discriminate against crypto.
Shares in Strategy, which began life as software firm MicroStrategy, skyrocketed 3,000% after it began buying bitcoin in 2020, although they have since fallen sharply, and are down about 43% this year amid the cryptocurrency's slump.
Dozens more companies have been inspired to buy and hold crypto tokens on their own balance sheets in the hopes they will gain value, although questions are growing over the sustainability of these businesses.
MSCI is holding a public consultation and will announce a decision by January 15. Analysts say that if it excludes digital asset treasury (DAT) companies, other index providers could follow.
"The conversation already extends beyond just MSCI... to the eligibility of DATs in equity indexes in general," Kaasha Saini, head of index strategy at Jefferies, told Reuters, adding that she expects most equity indexes would move to follow MSCI.
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