Strategy Standing Firm Against MSCI: DAT's Ultimate Defense

Author: KarenZ, Foresight News

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The game involving the development of the Digital Asset Treasury Company (DAT) industry continues.

In October, global index provider MSCI proposed to exclude companies holding 50% or more of their assets in digital assets from its Global Investable Market Index. This move directly threatens the market position of digital asset treasury companies represented by Strategy and could even rewrite the capital flows within the entire digital asset treasury industry.

According to data from Bitcoin for Corporations, 39 companies may be excluded from MSCI’s Global Investable Market Index. Previously, J.P. Morgan analysts warned that the exclusion of just Strategy could lead to nearly $2.8 billion in passive fund outflows. If other index providers follow suit, the total capital outflow could reach as much as $8.8 billion.

Currently, MSCI’s consultation period on this proposal will last until December 31, 2025. The final decision is expected to be announced before January 15, 2026. If adjustments are made, they will be incorporated into the index review in February 2026 for formal implementation.

In response to this urgent situation, Strategy submitted a 12-page public letter to MSCI’s Equity Index Committee on December 10, co-signed by Chairman and Founder Michael Saylor and President and CEO Phong Le, clearly expressing firm opposition. The letter states: “This proposal is highly misleading and will cause profound and destructive consequences for the interests of global investors and the development of the digital asset industry. We strongly request MSCI to completely withdraw this plan.”

Four Core Arguments of Strategy’s Defense

1. Digital Assets Are Revolutionary Foundation Technologies Reshaping the Financial System

Strategy believes that MSCI’s proposal underestimates the strategic value of Bitcoin and other digital assets. Since Satoshi Nakamoto launched Bitcoin 16 years ago, this digital asset has gradually grown into a key component of the global economy, with a current market capitalization of approximately $1.85 trillion.

In Strategy’s view, digital assets are not merely simple financial instruments but represent a fundamental technological innovation capable of reshaping the global financial system. Companies investing in Bitcoin-related infrastructure are building a new financial ecosystem, akin to industry leaders historically deeply involved in emerging technologies.

Just as Standard Oil in the 19th century focused on oil well extraction and AT&T in the 20th century built the telephone network, these companies relied on forward-looking investments in core infrastructure to lay a solid foundation for subsequent economic transformation, ultimately becoming industry benchmarks. Strategy believes that companies focusing on digital assets today are following this “technological pioneer” path and should not be simply dismissed under traditional index rules.

2. DAT Is an Operating Enterprise, Not a Passive Fund

This is the core argument of Strategy’s defense — Digital Asset Treasury Companies (DAT) are fully operational enterprises with complete business models, not just passive investment funds holding Bitcoin. Although Strategy currently holds over 600,000 BTC, its core value does not rely on Bitcoin price fluctuations but on designing and launching unique “digital credit” instruments to generate sustainable returns for shareholders.

Specifically, Strategy issues various types of “digital credit” instruments, including fixed and floating dividend preferred shares with different priorities and credit protection clauses. Funds raised from selling these instruments are used to increase Bitcoin holdings. As long as Bitcoin’s long-term investment return exceeds Strategy’s USD-denominated financing costs, it can provide stable returns for shareholders and clients. Strategy emphasizes that this “active operation + asset appreciation” model is fundamentally different from traditional investment funds or ETFs’ passive management and should be regarded as a normal operating enterprise.

Meanwhile, Strategy questions why oil giants, Real Estate Investment Trusts (REITs), lumber companies, and other industries holding concentrated single-asset positions are not classified as investment funds and excluded from indices. Setting special restrictions only for digital asset companies clearly violates principles of fairness.

3. The 50% Digital Asset Threshold Is Arbitrary, Discriminatory, and Impractical

Strategy points out that MSCI’s proposal employs discriminatory standards. Many large companies in traditional industries also hold a high concentration of a single asset class, including oil and gas companies, REITs, lumber firms, and power infrastructure companies. However, MSCI only applies a special exclusion standard to digital asset companies, which constitutes obvious unfair treatment.

Regarding feasibility, the proposal also faces serious issues. Due to the volatility of digital asset prices, the same company could repeatedly enter and exit MSCI indices within days because of asset value fluctuations, causing market chaos. Additionally, differences in accounting standards (US GAAP vs. international IFRS) in handling digital assets would lead to different treatment for companies with similar business models depending on their jurisdiction.

4. Violates Index Neutrality and Injects Policy Bias

Strategy believes that MSCI’s proposal is essentially a valuation judgment of certain assets, violating the fundamental principle that index providers should remain neutral. MSCI claims to the market and regulators that its indices provide “comprehensive” coverage to reflect “evolution in the underlying equity markets” and should not make judgments about “any market, company, strategy, or investment’s quality or appropriateness.”

By selectively excluding digital asset companies, MSCI is effectively making policy judgments on behalf of the market, which is precisely what index providers should avoid.

5. Contradicts US Digital Asset Strategy

Strategy emphasizes that the proposal conflicts with the strategic goal of the Trump administration to promote US leadership in digital assets. During its first week in office, the Trump administration signed an executive order to foster digital financial technology growth and established a strategic Bitcoin reserve, aiming to make the US a global leader in digital assets.

If MSCI’s proposal is implemented, it would directly prevent US pension funds, 401(k) plans, and other long-term capital from investing in digital asset companies, leading to billions of dollars in capital outflows from the industry. This would not only hinder the development of American digital asset innovation companies but could also weaken US competitiveness in this strategic field, running counter to the government’s policy direction.

Strategy cites analyst estimates that just Strategy could face up to $2.8 billion in passive stock liquidations due to MSCI’s proposal. This would harm Strategy itself and could create a chilling effect on the entire digital asset ecosystem, potentially forcing Bitcoin miners to sell assets prematurely to adjust their portfolios, thereby distorting normal supply and demand in the digital asset market.

Strategy’s Final Demands

In the open letter, Strategy makes two main requests:

First, that MSCI withdraw the exclusion proposal entirely, allowing the market to determine the value of digital asset treasury companies (DAT) through free competition, enabling the index to neutral and faithfully reflect the development trends of next-generation financial technology;

Second, if MSCI insists on “special treatment” for digital asset companies, it should expand industry consultation scope, extend the consultation period, and provide more sufficient logical support to justify the rules.

Strategy Is Not Fighting Alone

Strategy is not fighting alone. According to BitcoinTreasuries.NET data, as of December 11, 208 publicly listed companies worldwide hold over 1.07 million BTC, accounting for more than 5% of the total Bitcoin supply, with a current value of approximately $100 billion.

Source: BitcoinTreasuries.NET

These digital asset treasury companies have become an important bridge for institutions adopting cryptocurrencies, providing compliant indirect exposure for pension funds, endowments, and other traditional financial institutions.

Previously, publicly traded Bitcoin holder Strive suggested MSCI should give the “choice” back to the market for digital asset companies. A simple and direct solution is to create a “digital asset treasury excluded” version of existing indices, such as MSCI USA ex Digital Asset Treasuries Index and MSCI All Country World ex Digital Asset Treasuries Index, via transparent screening mechanisms, allowing investors to choose benchmarks they wish to track, preserving index integrity and meeting different investor needs.

Additionally, industry organization Bitcoin for Corporations has initiated a joint letter urging MSCI to withdraw the digital asset proposal. They advocate classifying companies based on actual business models, financial performance, and operational characteristics rather than simply asset ratio thresholds. According to the organization’s website, 309 companies or investors have signed the joint letter, including Strategy, Strive, BitGo, Redwood Digital Group, 21MIL, Btc Inc, DeFi Development Corp, and other well-known industry leaders, as well as many individual developers and investors.

Summary

The confrontation between Strategy and MSCI is essentially a fundamental debate about “how emerging financial innovations integrate into traditional systems.” Digital Asset Treasury Companies (DAT) are a cross-border entity between the traditional finance world and the cryptocurrency space — neither purely tech companies nor simple investment funds, but a new business model built on digital assets.

MSCI’s proposal attempts to categorize these complex entities as “investment funds” and exclude them based on a “50% asset ratio” standard. Strategy insists that this simplification is a serious misunderstanding of their business nature and a deviation from the principle of index neutrality. With the decision date approaching on January 15, 2026, the outcome of this game will not only determine the eligibility of several Bitcoin-holding listed companies for index inclusion but will also define the critical “survival boundary” for the future position of the digital asset industry within the global traditional financial system.