On Wednesday, shares of Strategy (MSTR) climbed by 6% after Morgan Stanley Capital International (MSCI) announced that it would maintain the inclusion of digital asset treasury companies (DATCOs) in its indexes.
Strategy Maintains Index Designation
Speculation surrounding a potential exclusion of Strategy—the leading player in the Bitcoin treasury space led by CEO Michael Saylor—had fueled uncertainty in the market.
This concern contributed to a considerable decline in cryptocurrency prices including Bitcoin on October 10, as investors grappled with the implications of losing a key index designation.
In its announcement issued on January 6, MSCI confirmed that it would not move forward with the proposal to exclude DATCOs from the MSCI Global Investable Market Indexes as part of its upcoming February 2026 Index Review.
Consequently, companies meeting the criterion of holding 50% or more of their assets in digital currencies will remain categorized as they are.
However, MSCI did implement a crucial change in its guidelines, prompting significant implications for treasury-focused companies like Strategy.
Capital-Raising Challenges Ahead
Analysts at Bull Theory noted that previously, when Strategy would issue new shares to raise capital, MSCI would include these shares in their index, thus creating an automatic demand from index funds—typically requiring them to acquire 10% of the new shares. This forced buying could substantially benefit MicroStrategy.
For example, if the shares were priced at $300 each and the company issued 20 million new shares, index funds would be compelled to purchase approximately $600 million worth of shares, enhancing Strategy’s ability to raise capital and, subsequently, its Bitcoin holdings.
Under the new MSCI rule, however, while Strategy can still issue shares, MSCI will not increase the share count in its index. As a result, index funds are not obliged to buy any new shares, eliminating this previous demand.
This shift requires Strategy to seek private buyers for its new shares, which may lead to lower capital raised and an inability to purchase as much Bitcoin as before.
Morgan Stanley’s ETF Plans
Market expert Crypto Rover emphasized the underlying question: why did MSCI make this change? Given MSCI’s origins with Morgan Stanley, the connection to the banking institution is significant.
Bitcoinist reported on Tuesday that Morgan Stanley filed for a spot Bitcoin and Solana (SOL) exchange-traded fund (ETF), positioning MSTR as a direct competitor in the crypto investment space.
Rover highlights that many investors opt for Strategy as a means to gain passive exposure to Bitcoin, which has contributed to a steady rise in MSTR stock and has established the company as the largest corporate holder of Bitcoin.
With the new MSCI directive, Rover alleges that Strategy may face challenges in accumulating more Bitcoin. Any attempts to dilute shares could lead to significant declines in MSTR stock due to the lack of passive demand.
The expert also asserts that this situation may prompt large investors to reallocate their funds from Strategy and similar treasury firms into Bitcoin ETFs, particularly given the likelihood that Morgan Stanley’s ETF will attract significant investment.
At the time of writing, MSTR is trading at $166, having made a slight recovery from the 16-month low of $150 reached last Friday.
Featured image from DALL-E, chart from TradingView.com