‘Bitcoin doesn’t need MSCI’ – Strategy fires back as MSTR deletion odds hit 73%

During the backlash, Bitcoin treasury firms maintained that MSCI was wrongly targeting the crypto sector.

To likely clear the bias argument, MSCI came back with a broader framework. The new rule flagged even Yellow Cake, a firm that buys and holds uranium, to be excluded from the index. 

Now crypto supporters’ counter-argument has gone from bias to “MSCI shouldn’t decide which assets companies are allowed to own.”

For his part, Khing Oei, CEO of Treasury B.V, Europe’s first BTC treasury firm backed by the Winklevoss twins, said, 

Strategy runs a permanent capital operation, listed preferreds and converts repriced by the credit market every day. Reading that as a passive holding is measuring the wrong side of the balance sheet.

For perspective, the new broader framework still seeks to exclude “non-operating companies” from its listing.

So if a firm does not generate income from active business services, it will be flagged. Additional screening targets operating cash and five other metrics (financial ratios). 

For Oei, however, Strategy’s preferred stocks like STRC, which represent ‘digital credit’, qualify the firm as an operating company. In short, Strategy should not be excluded. 

Rising risk of MSCI’s threat

Unfortunately, MSCI thinks otherwise; the two top BTC treasury firms are among the ones marked for deletion. 

It remains to be seen if the industry will convince MSCI that Strategy and Metaplanet are “operating companies.” Feedback on the proposed rule will be finalized by September and a decision made by October. 

MSTR initially dropped by 2% during pre-market hours on Friday after the update. At the end of the Friday trading session, the stock was down 4.18% and closed at $93.04. Besides, the market priced a 73% chance that Strategy could be axed from the MSCI index by December. 

Put differently, the fears may deepen the stock’s pullback. 

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Final Summary

• Strategy cautioned MSCI that it shouldn’t decide for companies what assets to hold 
• The market was pricing a 73% chance that Strategy will be deleted from MSCI by the end of the year

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