Ever wondered why a crypto‑focused firm can disappear from a major market index overnight? This article explains how index providers decide which companies qualify as “operating” businesses, why those rules matter for crypto treasury firms, and what you should consider if you’re looking to earn from such companies.
What “operating company” means in index methodology
Index providers such as MSCI, FTSE Russell, or S&P Dow Jones create benchmarks that investors use to track market performance. To be eligible for inclusion, a company must meet a set of criteria that usually focus on two things: substantial operating assets and a track record of generating revenue from core business activities.
Operating assets are the tangible and intangible resources a firm uses day‑to‑day to produce goods or services—think factories, equipment, patents, or a network of customers. In contrast, non‑operating assets are items that sit on the balance sheet but do not directly drive earnings, such as cash reserves, investment securities, or idle real estate.
When an index provider evaluates a company, it typically runs a series of financial tests. The first test checks whether the firm holds “substantial operating assets.” If it passes, the provider then applies additional tests—often related to revenue size, profitability, and cash‑flow stability. Companies that fail the operating‑asset test are deemed “non‑operating” and may be excluded, even if they hold large amounts of cash or other assets.
Why crypto treasury firms are under scrutiny
Crypto treasury companies—businesses that primarily hold and manage digital assets—often have balance sheets dominated by cryptocurrency holdings rather than traditional operating assets. Their revenue may come from fees on staking, lending, or custody services, but the bulk of their value is tied to the market price of the assets they own.
This structure makes it difficult for index providers to classify them under conventional “operating” definitions. If a provider decides that a firm’s primary value source is asset accumulation rather than ongoing operations, it may apply the non‑operating rule and remove the firm from its benchmark.
Real‑world illustration: MSCI’s 2026 proposal
In October 2026, the Bitcoin Policy Institute (BPI) highlighted a proposal from MSCI that could label companies such as Strategy and Metaplanet as “non‑operating.” MSCI had originally considered a crypto‑specific exclusion in 2025 but paused after industry pushback. The new, broader rule would first assess whether a firm has substantial operating assets and then apply five additional financial tests. MSCI’s own simulation showed that Strategy, Metaplanet, and even uranium miner Yellow Cake would be removed under the new methodology.
The potential exclusion matters because many funds track MSCI indexes. If a company is dropped, those funds may be forced to sell their holdings, leading to large outflows. JPMorgan analysts estimated that Strategy could face about $2.8 billion in outflows if excluded.
What this means for you as an online earner
If you earn passive income by holding shares in crypto treasury firms, index exclusion can create sudden price pressure. Large institutional sales can depress the stock price, reducing the value of any dividends or staking rewards you receive. Conversely, if a firm remains in a major index, it may attract more stable, long‑term investors, potentially supporting its share price and the sustainability of its earnings.
Understanding the criteria that drive inclusion helps you assess the stability of your investments. A firm that meets clear operating‑asset standards is less likely to face abrupt index removal, offering a more predictable environment for earning.
How to evaluate a crypto treasury firm’s index risk
- Check the balance sheet composition. A high proportion of cash or crypto holdings relative to tangible operating assets raises red flags.
- Review the company’s revenue sources. Consistent fees from services (staking, custody, lending) indicate operating activity.
- Look for disclosures on index eligibility. Companies often state whether they are part of MSCI, FTSE, or S&P benchmarks.
- Monitor regulator and index provider updates. Proposals for rule changes are usually published for comment before implementation.
- Assess the investor base. A large share of passive‑index fund holdings can amplify price moves if the firm is excluded.
FAQ
Q: Does being excluded from an index mean a crypto treasury firm is a bad investment?
Not necessarily. Exclusion can cause short‑term price pressure, but the firm’s underlying assets and business model may still be sound. Evaluate the fundamentals separately.
Q: How often do index providers change their inclusion rules?
Major providers typically review methodologies annually, with public consultations and a feedback period before final decisions are announced.
Q: Can a crypto treasury firm improve its chances of staying in an index?
Yes. By developing diversified revenue streams, investing in operational infrastructure, and transparently reporting operating assets, a firm can better meet “operating” criteria.
Q: Should I avoid all crypto treasury stocks because of index risk?
Avoiding them outright may be too extreme. Instead, weigh the index risk against other factors such as the firm’s growth prospects, fee structure, and overall market exposure.
This article references reporting from cointelegraph.com.
