MSCI "Companies Holding Bitcoin Will Not Be Removed from Index"… Strategy up 6%

Morgan Stanley Capital International (MSCI) has temporarily put on hold plans to exclude companies that hold large amounts of virtual assets (cryptocurrencies) from global indices.

MSCI said on the 6th (local time) in an official statement that "it has decided not to implement the proposal to exclude digital asset holding companies (DATCOs·Digital Asset Treasury Companies) from the MSCI Global Investable Market Index in February."

As a result, companies that use virtual assets as a core means of corporate fund management, such as Strategy, have for now avoided the risk of being removed from the index. In particular, Strategy's stock jumped more than 6% in after-hours trading. Bitcoin, which had been under selling pressure in regular trading that day, also rebounded about 1% immediately after the news, recovering the intraday $94,000 level. Other digital asset holding companies (DATs) such as BitMine, SharpLink, and Twenty One Capital also rose together in after-hours trading.

However, MSCI made it clear that this decision is a 'conditional deferral' rather than full approval. MSCI explained that "as a result of market consultations, institutional investors are concerned that some digital asset holding companies show characteristics similar to 'investment funds' that would be ineligible for index inclusion."

MSCI said it will allow the continued inclusion of digital asset holding companies currently in the index but will restrict their increasing influence. According to the announcement, these companies will not receive increases in the number of shares (NOS) nor in the foreign inclusion factor (FIF) and domestic inclusion factor (DIF). In other words, even if stock prices rise or the number of free-floating shares increases, their weight in the index will be artificially frozen.

It also said companies whose holdings of virtual assets amount to 50% or more of total assets will be classified as a 'watchlist', and their new index inclusion or moves between size segments (large-, mid-, small-cap) will be fully suspended.

MSCI said, "Digital asset holding companies may be part of a broad group of companies whose activities are investment-focused rather than operations-focused," and "it plans to carry out broader consultations to determine how to handle this going forward. It will update the watchlist if corporate disclosures change the status of digital asset holdings."