Strategy Stands Firm Against MSCI: DAT's Ultimate Defense

Author: KarenZ, Foresight News

The ongoing battle concerning the development of the Digital Asset Treasury Company (DAT) industry continues.

In October, global index provider MSCI proposed to exclude companies holding 50% or more of their assets in digital assets from its global investable market indices. This move directly threatens the market position of digital asset treasury companies represented by Strategy, and could even rewrite the capital flow landscape of the entire digital asset treasury industry.

According to data from Bitcoin for Corporations, 39 companies might be excluded from MSCI’s global investable market index. JPMorgan analysts previously warned that just excluding Strategy could lead to nearly $2.8 billion in passive fund outflows, and if other index providers follow suit, the total could reach up to $8.8 billion.

Currently, MSCI’s consultation period for this proposal will last until December 31, 2025, with a final decision expected to be announced by January 15, 2026. Any adjustments made during this period will be incorporated into the index review in February 2026 for formal implementation.

In response to this urgent situation, Strategy submitted a strongly worded 12-page open letter to MSCI’s Equity Index Committee on December 10, jointly signed by the company’s Executive Chairman and Founder Michael Saylor and President and CEO Phong Le, explicitly opposing the proposal. The letter states: “This proposal is highly misleading and will cause profound and destructive consequences for the interests of global investors and the development of the digital asset industry. We strongly demand MSCI to completely withdraw this plan.”

Four Core Defense Arguments of Strategy

Digital assets are revolutionary foundational technologies reshaping the financial system

Strategy believes that MSCI’s proposal underestimates the strategic value of Bitcoin and other digital assets. Since Satoshi Nakamoto launched Bitcoin 16 years ago, this digital asset has gradually grown into a critical component of the global economy, with a current market cap of approximately $1.85 trillion.

In Strategy’s view, digital assets are not merely simple financial instruments but a fundamental technological innovation capable of reshaping the global financial system. Companies investing in Bitcoin infrastructure are building a new financial ecosystem, similar to how industry leaders historically deepened their presence in emerging technologies—like Standard Oil in the 19th century and AT&T in the 20th—by making forward-looking investments in core infrastructure, thereby laying a solid foundation for subsequent economic transformation and becoming industry benchmarks. Strategy believes that today’s companies focusing on digital assets are following this “pioneering technology” path and should not be simply dismissed by traditional index rules.

DAT is an operating enterprise, not a passive fund

This is the core of Strategy’s rebuttal—Digital Asset Treasury Companies (DAT) are fully-fledged operating businesses with sustainable business models, not merely passive investment funds holding Bitcoin. Although Strategy currently holds over 600,000 BTC, its core value does not depend on Bitcoin price fluctuations but on designing and offering unique “digital credit” tools that generate sustainable returns for shareholders.

Specifically, Strategy issues various types of “digital credit” instruments, including fixed-dividend, floating-dividend, preferred shares with different priorities, and credit protection clauses. Funds raised from selling these instruments are used to increase Bitcoin holdings. As long as the long-term investment return on Bitcoin exceeds Strategy’s USD-denominated financing costs, stable income can be generated for shareholders and clients. Strategy emphasizes that this “active operation + asset appreciation” model is fundamentally different from traditional passive management of investment funds or ETFs and should be regarded as a legitimate operating business.

Meanwhile, Strategy also questions in its letter: why can oil giants, real estate investment trusts (REITs), and timber companies hold concentrated positions in a single asset class without being classified as investment funds and excluded from indices? Targeting only digital asset companies with special restrictions clearly violates principles of industry fairness.

The 50% digital asset threshold is arbitrary, discriminatory, and unrealistic

Strategy points out that MSCI’s proposal employs discriminatory standards. Many large companies in traditional industries also hold significant concentrations of a single asset class, including oil and gas firms, REITs, timber companies, and electric infrastructure enterprises. However, MSCI only applies special exclusion standards to digital asset companies, which constitutes clear unfair treatment.

From a practical implementation perspective, the proposal also faces serious issues. Due to the high volatility of digital asset prices, a single company might repeatedly enter and exit MSCI indices within just a few days due to changes in asset value, causing market confusion. Moreover, differences between accounting standards (US GAAP versus international IFRS) regarding digital assets will result in companies with similar business models being treated differently depending on their jurisdiction.

Violates the principle of index neutrality and introduces policy bias

Strategy believes that MSCI’s proposal essentially involves a judgment of asset value and violates the fundamental principle that index providers should remain neutral. MSCI claims to market and regulators that its indices provide “comprehensive” coverage to reflect “the evolution of underlying equity markets” and should not make judgments about “any market, company, strategy, or investment’s quality or appropriateness.”

By selectively excluding digital asset companies, MSCI is effectively making policy judgments on behalf of the market, which is exactly what index providers should avoid.

Contradicts US digital asset strategy

Strategy emphasizes that the proposal conflicts with the strategic goal of the Trump administration to promote US leadership in digital assets. During his first week in office, Trump signed an executive order to promote digital financial technology growth and established a strategic Bitcoin reserve to position the US as a global leader in digital assets.

However, if MSCI’s proposal is implemented, it could directly prevent US pension funds, 401(k) plans, and other long-term investors from investing in digital asset companies, leading to billions of dollars in capital outflows from the industry. This would not only hinder the development of US-based digital asset innovation companies but also weaken the US’s competitive edge in this strategic sector, running counter to the government’s established policies.

Analysis estimates cited by Strategy suggest that MSCI’s proposal could cause passive liquidation of up to $2.8 billion worth of Strategy’s stock alone. This would harm Strategy itself and could also send a chilling effect across the entire digital asset ecosystem, for example, forcing Bitcoin miners to sell assets prematurely to rebalance portfolios, thereby distorting the normal supply and demand dynamics of digital markets.

Strategy’s Final Demands

In its open letter, Strategy puts forward two main demands:

First, that MSCI fully withdraw the exclusion proposal, allowing the market to freely assess the value of digital asset treasury companies (DAT) and ensuring that indices neutrally and accurately reflect the future development trend of next-generation financial technology;

Second, if MSCI insists on “special treatment” for digital asset companies, it should expand industry consultation scope, extend consultation duration, and provide stronger logical support to justify the rules.

Strategy Is Not Fighting Alone

Strategy is not fighting alone. According to BitcoinTreasuries.NET data, as of December 11, 208 publicly listed companies worldwide hold over 1.07 million BTC, accounting for more than 5% of the total Bitcoin supply, with a current value of approximately $100 billion.

Source: BitcoinTreasuries.NET

These digital asset treasury companies have become an important bridge for institutional adoption of cryptocurrencies, offering compliant indirect exposure for pension funds, endowments, and other traditional financial institutions.

Previously, the listed company holding Bitcoin, Strive, suggested that MSCI should hand back the “discretion” to the market regarding digital asset companies. A simple and direct solution is to create a version of existing indices that excludes digital asset treasury companies, such as MSCI USA ex Digital Asset Treasuries Index and MSCI ACWI ex Digital Asset Treasuries Index, using transparent screening mechanisms to allow investors to choose benchmarks they follow, preserving index integrity while meeting different investor needs.

Additionally, industry group Bitcoin for Corporations has launched a joint petition urging MSCI to withdraw the digital asset proposal, advocating for classification based on actual business model, financial performance, and operational features rather than simple asset percentage thresholds. According to their official website, currently 309 companies or investors have signed the joint letter, including senior executives from well-known firms such as Strive, BitGo, Redwood Digital Group, 21MIL, Btc inc, DeFi Development Corp, among others, as well as numerous individual developers and investors.

Summary

The confrontation between Strategy and MSCI is fundamentally a debate on “how emerging financial innovations can integrate into the traditional system.” Digital Asset Treasury Companies (DAT), as “cross-border” entities between traditional finance and the crypto world, are neither pure technology firms nor simple investment funds, but a new business model built upon digital assets.

MSCI’s proposal attempts to classify these complex entities as “investment funds” and exclude them based on a “50% asset share” standard; however, Strategy insists that such a simplified approach severely misunderstands their core business essence and deviates from the principle of index neutrality. As the decision date approaches on January 15, 2026, the outcome of this battle will not only determine the inclusion of several Bitcoin-holding listed companies in indices but also define a critical “survival boundary” for the future position of the digital asset industry within the global traditional financial system.