MicroStrategy Mounts Strong Defense Against MSCI’s Proposed Crypto Index Exclusion

Bitcoin investment titan MicroStrategy (MSTR) has launched a vigorous counter-offensive against MSCI, the global index provider, over its controversial proposal to potentially remove companies with significant cryptocurrency holdings from its benchmark indices. On Wednesday, MicroStrategy formally submitted a comprehensive 12-page letter, unequivocally condemning the proposition as “highly misleading, harmful,” and fundamentally at odds with the United States government’s proactive stance on digital asset innovation.

The Genesis of the Dispute: MSCI’s Re-evaluation

The contentious issue first surfaced in October when MSCI announced its intention to reassess the inclusion criteria for its Global Investable Market Indexes (GIMI). Specifically, MSCI is considering the exclusion of companies where “cryptocurrency holdings constitute over 50% of total assets.” A definitive decision is anticipated by January 15, 2026, with any resulting adjustments slated for formal implementation during the February 2026 index review cycle.

MicroStrategy’s detailed refutation, dated December 10, was directed to the MSCI Equity Index Committee, outlining its profound objections.

MicroStrategy’s Core Arguments: An Unfair and Impractical Stance

Michael Saylor, Executive Chairman of MicroStrategy, spearheaded the company’s opposition, arguing that the proposed “50% asset ratio” threshold is both arbitrary and impractical. Saylor highlighted a critical inconsistency: while numerous global enterprises hold substantial reserves of traditional commodities like oil, timber, or gold without facing similar index restrictions, MSCI’s proposal uniquely targets companies holding digital assets. This, he asserts, constitutes a clear case of unfair and discriminatory treatment.

Accounting Discrepancies and Market Volatility

Furthermore, MicroStrategy’s letter underscored that MSCI’s proposal fails to account for the inherent volatility of the Bitcoin market and the divergent accounting standards applied globally. The company pointed out that under international IFRS standards, Bitcoin can be accounted for at “cost,” whereas US GAAP mandates quarterly adjustments to “fair value.” This disparity could lead to two companies with identical Bitcoin exposure being treated differently by MSCI simply due to their jurisdictional accounting practices, thereby hindering consistent rule application.

Contradicting U.S. Policy and Jeopardizing Competitiveness

MicroStrategy also issued a stark warning: the proposed exclusion runs contrary to the evolving stance of the US government, which is increasingly embracing and supporting digital asset innovation. Implementing such a policy, MicroStrategy contends, would not only trigger significant outflows from passive funds but also severely undermine the United States’ competitive edge in the rapidly expanding global digital asset and fintech sectors.

MicroStrategy: An Operating Business, Not a Passive Investment Fund

Michael Saylor emphasized that digital asset reserve companies, including MicroStrategy, are fundamentally operating businesses that strategically deploy digital assets as productive capital. They are not merely passive investment vehicles designed to track cryptocurrency price fluctuations.

MicroStrategy elaborated that its engagement with Bitcoin extends far beyond simple holding. The company actively leverages its Bitcoin reserves to develop collateralized credit instruments, execute sophisticated corporate treasury management strategies, and continues to operate its established global enterprise analytics software business.

Five Key Reasons MicroStrategy is Not an Investment Fund:

• MicroStrategy operates with the organizational structure of a standard operating enterprise, distinctly separate from a fund-type vehicle.
• The company explicitly avoids fund or Exchange Traded Product (ETP) structures and does not assume any associated obligations.
• Under prevailing regulatory frameworks, MicroStrategy does not qualify as an “investment company.”
• Investors holding MSTR shares do not benefit from any “fund-style” tax arrangements.
• MicroStrategy boasts a long-standing history as an enterprise software company, complete with a robust operating history and a well-defined business model.

A Call for Withdrawal or Extended Consultation

In conclusion, MicroStrategy urged MSCI to retract its proposal to exclude digital asset reserve companies from its indices. Should MSCI persist with differentiated treatment for digital asset firms, MicroStrategy insists on an extended consultation period and the presentation of more detailed and rationally justified criteria.

The potential implications of MSCI’s decision are substantial. JPMorgan Chase analysts previously estimated that if MicroStrategy were to be delisted from major indices, it could trigger outflows totaling an estimated $8.8 billion.

MicroStrategy Faces ‘Index Delisting’ Risk! JPMorgan: Could Trigger $8.8 Billion in Outflows