Strive Challenges MSCI's Index Exclusion Proposal
- Strive challenges MSCI’s index exclusion proposal for Bitcoin treasury firms.
- Focus on maintaining index neutrality and market choices.
- Potential financial impacts on equity flows to Bitcoin-treasury companies.
Strive has urged MSCI to let the market determine the inclusion of Bitcoin treasury companies in global equity indices, opposing MSCI’s exclusion criteria based on digital-asset holdings.
The decision could impact equity flows and corporate Bitcoin reserves, influencing market access to public Bitcoin exposure but not forcing asset liquidation.
Strive Asset Management has formally urged MSCI to reconsider its proposed exclusion of Bitcoin treasury companies from its global equity indices. This action comes amid concerns over the 50% digital-asset holdings threshold. Strive advocates for market determination.
Strive, a major Bitcoin treasury firm, holds over 7,500 BTC. It challenges MSCI’s CEO Henry A. Fernandez, warning against the potential departure from index neutrality. Strive requests “ex-digital-asset treasury” index variants for better options. In his engagement letter, Fernandez noted that “Strive characterizes MSCI’s 50% digital-asset holdings threshold as ‘unjustified, overbroad and unworkable’.” Refer to the Engagement Letter Overview for MSCI for more details.
The implications of MSCI’s decision extend to cryptocurrency markets. Strive believes excluding firms like itself and others could distort passive equity flows. Their commentary highlights potential high index turnover and unstable membership.
MSCI’s consideration could affect industries and markets by creating jurisdictional inconsistencies. Strive notes differences between U.S. GAAP and IFRS accounting for digital assets, which may skew index applications globally.
The debate over index inclusion reflects broader financial, regulatory, and accounting dynamics. Strive highlights the risk of equity investors losing exposure to Bitcoin through misclassification. The firm calls for investor choice in valuing BTC holdings.
Potential outcomes include existing firms being treated as investment funds rather than operations due to Bitcoin holdings. Historical insights from similar index methodology challenges emphasize the balance between neutrality and thematic exclusions.
