MSCI Reassures Investors With Status Quo On DATCO

Under regulatory pressure, MSCI makes a decisive choice. The index issuer announced on January 6 that it would maintain companies with significant crypto treasury in its global indices. A temporary decision, while the status of these companies, including Strategy, remained uncertain. This signal stabilizes their exposure in institutional portfolios and extends their integration into traditional markets, at a time when the gap between traditional finance and crypto continues to narrow.

MSCI keeps DATCOs in its indices : a status quo under watch

In a note published this Tuesday, MSCI (Morgan Stanley Capital International) announced it will not remove, at this stage, Digital Asset Treasury Companies (DATCO) from its global stock indices, while Strategy had escaped exclusion during the first Nasdaq 100 screening last December.

Such an announcement follows a series of feedback from institutional investors worried about the consequences of such an exclusion. “This decision follows investor feedback and is part of a broader analysis aimed at differentiating investment companies from companies whose cryptos are an integral part of their operations,” MSCI specified.

Moreover, this concerns notably companies like Strategy, whose strategy relies largely on accumulating bitcoin.

Here are the key elements of MSCI’s decision :

• Maintaining DATCOs in MSCI global indices, despite internal debates about their actual economic status ;

• Definition criteria : a DATCO is a company whose cryptos represent 50% or more of total assets on the balance sheet ;

• Main reason : feedback from investors who expressed concerns about premature exclusion, which could cause unwanted market effects ;

• Immediate effect : the concerned companies remain eligible for passive capital flows, notably via index funds (ETFs) based on MSCI indices ;

• A broader consultation will be organized to clarify exclusion criteria in the future, especially regarding so-called “non-operational” companies.

This choice thus allows, for now, companies heavily exposed to cryptos to retain their attractiveness for institutional investors, while avoiding massive passive capital outflows.

This is not a definitive approval, but a conditional status quo, awaiting a structural reassessment of the inclusion methodology for companies in MSCI indices.

Relieved markets, but an equation far from solved

This decision, though technically appearing minor, generated an immediate reaction in financial markets. The price of Strategy stock (MSTR), strongly correlated with bitcoin movements, first dropped 4.1 % during Tuesday’s session before rebounding 5 %.

This reversal suggests that investors anticipated a possible exclusion of the company from MSCI indices, and the final decision was perceived as a positive stability signal. Indeed, an exit from the indices could have automatically reduced MSTR stock holdings by many passive funds, causing massive institutional capital withdrawal.

MSCI indicated it will soon conduct a broader review of its methodology concerning non-operational companies. Therefore, this is not a definitive green light for DATCOs. The distinction between disguised investment companies and companies truly active in the crypto economy remains to be refined. This stance implies the status quo could be challenged this year, following a revamp of inclusion criteria.

Beyond the Strategy episode, this MSCI decision highlights a turning point in the integration of cryptos into traditional finance. The temporary maintenance of DATCOs in indices marks a reprieve but raises critical questions: to what extent is holding cryptos compatible with the structural requirements of benchmark indices? And when does a company cease being operational to become a mere investment vehicle?

Strategy restarts Bitcoin purchases despite a record $17 billion loss. This choice, amid MSCI index revisions, illustrates the ongoing tension between crypto conviction and institutional constraints. MSCI’s decision leaves open the question of the status of these hybrid companies, as the line between strategic reserve and speculation blurs.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.