Global index provider MSCI is reportedly reviewing the potential removal of Bitcoin-heavy companies from its indexes. This evaluation has sparked attention, especially regarding Strategy, a company with a significant digital asset reserve. Following Strategy official letter, Bitwise called on MSCI to remain neutral, highlighting possible consequences for crypto markets and institutional investment funds.

Why It Matters: MSCI’s decision could directly affect passive funds tracking indexes and companies’ digital asset strategies.

Bitwise Reacts and Stresses Neutrality

Bitwise publicly opposed MSCI’s proposal to remove Strategy from indexes. The company emphasized that indexes should reflect the market accurately rather than assess individual business models. According to Bitwise, Strategy’s Bitcoin operations are unique, generating long-term value. The statement also urged MSCI to reconsider, warning that the change could limit investor opportunities and create disadvantage.

“We were deeply disappointed to learn MSCI proposed removing Strategy from the Global Investable Market Index. Indexes should remain neutral and reflect the market rather than judge business models.”

Bitwise added that exchange-traded products cannot replicate Strategy’s operational approach, which has created shareholder value. The proposed MSCI rule would restrict investor access to digital asset investments and their industry leaders.

Strategy’s Official Letter and Industry Reactions

Strategy sent a 12-page letter to MSCI, criticizing the plan to remove companies with over 50% digital assets from global indexes. Key points included:

• 50% digital asset threshold is not applied to other industries

• Different accounting standards create unequal treatment

• Removal from indexes could generate investor uncertainty and market chaos

• The proposal conflicts with U.S. digital asset innovation policies and the Strategic Bitcoin Reserve initiative

Strategy noted that Bitcoin price fluctuations and accounting differences could cause companies with BTC reserves to enter and exit indexes repeatedly, creating investor confusion. MSCI claims these companies behave more like investment funds than traditional businesses. Critics argue the definition ignores operational activities and calls the 50% limit arbitrary.

Market Implications and Analyst Opinions

MSCI’s plan may directly impact Strategy’s $61 billion BTC reserve and passive funds tracking the indexes. The final decision, expected on January 15 before the February index rebalance, is critical for investors. Analysts estimate a potential $2.8 billion passive fund outflow if Strategy is removed, rising to $8.8 billion if other index providers follow. CEO Michael Saylor clarified that Strategy is not an investment fund and index classification does not define its operations.

Bitwise and Strategy’s responses have renewed debate over MSCI’s digital asset criteria, highlighting the importance of index neutrality. This discussion could influence crypto ETFs, digital asset strategies, and blockchain regulation, shaping investor behavior.

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