Strategy directly rebuts MSCI…"Index removal is arbitrary and discriminatory"

The world's largest Bitcoin (BTC) treasury company Strategy has directly rebutted Morgan Stanley Capital International (MSCI)'s review of removing it from indices.

Strategy said on the 10th (local time) that it submitted a response to MSCI regarding index exclusion. Strategy is reported to have been discussing potential index removal with MSCI recently. Strategy is currently included in the MSCI USA and MSCI World indices.

Strategy emphasized that MSCI misunderstands the business model of digital asset treasury (DAT) companies. Strategy said, "Strategy is not an investment fund but a company that actively leverages its held Bitcoin to generate returns for shareholders," and added, "Unlike investment funds, Strategy maintains operational flexibility to adjust value-creation strategies as innovative Bitcoin-based technologies develop."

It continued, "This flexibility is a core value evaluated by Strategy's investors and distinguishes Strategy from digital asset investment funds," and added, "Strategy, which invests in a single asset class (Bitcoin), should be treated the same as REITs or oil companies."

It also criticized MSCI's '50% rule'. Earlier, MSCI announced in October that companies holding digital assets such as Bitcoin amounting to 50% or more of total assets could be excluded from index inclusion. Strategy said, "The '50% rule' that applies only to digital assets is discriminatory, arbitrary, and impracticable," and stated, "The '50% rule' is designed to leave companies in other industries with single-asset-concentrated holdings untouched while arbitrarily singling out digital asset businesses for unprecedentedly unfavorable treatment."

It added, "If DAT companies are included and then excluded from MSCI indices due to asset price volatility, changes in accounting standards application, etc., a 'rollercoaster' effect will occur and index instability will increase," and said, "To manage this, MSCI should develop new metrics and methodologies to measure asset concentration on financial statements and monitor attempts to circumvent it."

Strategy also argued that MSCI's policy conflicts with the policy direction of the Donald Trump administration. Strategy said, "(If removed from indices) there is a risk that investment across the rapidly growing digital asset industry could be restrained," and explained, "This directly contradicts the current administration's pro-innovation policy stance."

Strategy said, "Digital assets such as Bitcoin are a technological innovation with the potential to become the foundation of the global financial system and an engine of economic growth," and added, "Now is more inappropriate than ever to take measures that weaken such innovative technologies."

Meanwhile, MSCI plans to decide on Strategy's index exclusion on the 15th of next month. U.S. digital asset manager Bitwise recently analyzed the probability of Strategy's MSCI index removal as over 75%.