MSCI Rule Puts Strategy at Risk, Says Bitcoin Policy Institute Paper

That leads to one of the more counterintuitive points in Brown’s research. The index provider doesn’t actually manage those trillions. Fund managers do. Yet when an index provider changes the companies on its list, funds built to track that benchmark generally have to adjust with it. As Brown’s analysis lays it out, the firm writing the rulebook never touches the investor’s money, but its decisions can still set billions of dollars in motion.

The mechanics became considerably less theoretical in 2025. The Bitcoin Policy Institute author recounts how MSCI proposed excluding companies whose digital assets represented at least 50% of total assets, putting the bitcoin treasury firm Strategy squarely in the frame. JPMorgan analysts estimated Strategy’s removal could prompt roughly $2.8 billion in selling by MSCI-tracking funds, climbing to $8.8 billion if other index providers followed.

MSCI eventually nixed the proposal, but Brown points to what happened next. The firm froze increases in the number of shares it would count for affected companies and deferred new additions while preparing a broader review.

Bitcoin Rule Returns Wearing a Different Hat

Seven months later, Brown writes, MSCI came back with a broader test that no longer singled out bitcoin (BTC) or digital assets by name. Instead, the August proposal centers on whether a company has enough “operating assets.” A company failing the initial 50% screen faces five additional financial tests and, if it isn’t already an index constituent, can be excluded after triggering four of them. Existing constituents receive buffers and generally must fail during two consecutive annual reviews before removal.