Bitcoin: Strategy threatened with exclusion from MSCI indices, MSTR counters

Strategy thought it had won the battle in January. Seven months later, MSCI returns with a different method that could lead to the same result: the removal of the largest listed holder of bitcoin from several global indices. This time, the word “crypto” almost disappears from the framework. In its place, five financial ratios intended to identify companies whose value depends more on accumulated assets than on traditional operating activity. And in MSCI’s simulation, Strategy falls directly into the net.

In Brief

Bitcoin: Strategy falls back into MSCI’s sights

The respite was short. In January, MSCI had ultimately maintained Strategy and other crypto-cash companies in its global indices. The index provider had abandoned an initial very simple approach: exclude companies whose digital assets represented at least 50% of the balance sheet. The new project goes further. And above all, it avoids directly targeting bitcoin.

MSCI now wants to identify so-called “non-operating companies.” The first test looks at balance sheet composition. If operating assets exceed 50% of the total, the company passes the hurdle. Otherwise, it faces a second set of five criteria: weight of operating assets, level of activity-related expenses, operating cash flow, fair value changes, and dependence on external financing. Four negative signals out of five can be enough to make a company ineligible.