Summary
- Strategy criticized MSCI’s proposed “non-operating company” rules, which could exclude it from the index provider’s global equity indexes.
- The company said the new proposal repeats the problems of MSCI’s earlier digital asset-specific plan and unfairly penalizes companies for holding bitcoin.
Why Index Providers Should Measure Markets, Not Dictate Assets
When it comes to measuring markets, index providers like MSCI should focus on providing accurate data, not deciding which assets companies can own. This is particularly important for companies that hold digital assets like bitcoin. Recently, Strategy, a leading bitcoin treasury company, pushed back against MSCI’s proposed methodology for identifying “non-operating companies,” which could result in its removal from the index provider’s global equity indexes.
This proposal has significant implications for companies that hold digital assets, and could potentially exclude them from major indexes. However, as Strategy noted, digital assets are assets, and index providers should not dictate which assets companies can own. This approach puts MSCI out of step with regulators, markets, and its own customers, and could have unintended consequences for the crypto market.
The Importance of Neutral Index Standards
Strategy has argued that it is an operating company, not an investment fund or passive bitcoin vehicle, with a software business, active treasury operations, and bitcoin-backed credit instruments. The company has urged MSCI to maintain neutral index standards, rather than imposing arbitrary thresholds for digital asset holdings. This approach would allow companies like Strategy to continue to operate and innovate in the crypto space, while also providing investors with accurate and unbiased market data.
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MSTR is lower by 4.3% on Friday as bitcoin dips to $62,600.
