On November 11, 2026, MSCI announced that Strategy would be removed from its equity indexes, effective after the market close on November 30. The decision follows the introduction of new criteria distinguishing operating companies from businesses whose economic models primarily resemble financial or investment vehicles. The review also affects other companies holding crypto-assets as a major component of their balance sheets, including Japan’s Metaplanet. For Strategy, the largest publicly traded corporate holder of Bitcoin, the most immediate consequences concern passive funds tracking MSCI indexes, which will need to adjust their portfolios. The decision also raises a broader question about how companies that have placed Bitcoin at the center of their business models should be classified and what that classification means for their access to institutional capital.
The revision of index eligibility criteria
The decision concludes a review process that began in 2025, when MSCI started examining the treatment of companies with significant crypto-asset holdings. The initial proposal called for excluding companies whose digital assets represented at least 50% of their total assets. In January 2026, however, MSCI decided not to implement that exclusion, concluding that a broader assessment was needed for businesses whose economic models resembled investment vehicles. A consultation launched the following August extended the analysis to companies considered predominantly non-operating, regardless of the nature of their holdings. On October 15, MSCI approved the new methodology, with implementation scheduled for the November index review.
The new framework introduces a two-stage assessment. The first stage evaluates whether a company has substantial operating assets relative to its overall asset base. Companies that fail this initial screening undergo an additional assessment based on five financial ratios reflecting their economic and balance sheet characteristics. A company becomes ineligible for the relevant indexes if it is flagged on at least four of the five ratios. To limit excessive turnover, the methodology also establishes specific conditions for removing existing constituents, requiring them to fail the eligibility screening in both of their two most recent annual reporting periods. MSCI may also consider available interim financial statements. The revised approach therefore replaces the earlier criterion based exclusively on the proportion of crypto-assets held, introducing a classification framework applicable to companies across different industries.
Strategy and the Bitcoin treasury business model
Strategy is the most prominent company affected by the review. Originally focused on enterprise software, it has progressively made Bitcoin the central component of its treasury strategy since 2020. Its business model relies on accumulating Bitcoin through corporate resources and capital raising activities, including common stock offerings, debt instruments, and preferred securities. The company has also developed a range of financial instruments targeting investors with different risk and return preferences, using its balance sheet to provide different forms of economic exposure. This transformation has substantially changed its asset composition and the relative importance of its traditional operations, making its classification particularly consequential for index eligibility.
Under the revised methodology, MSCI determined that Strategy was ineligible for the relevant indexes based on criteria designed to identify companies with characteristics similar to investment vehicles. Strategy disputes this approach, arguing that active capital management, securities issuance, and the development of credit products constitute genuine business activities. The company also maintains that the new criteria introduce a distinction not recognized by accounting standards, potentially disadvantaging innovative business models. The disagreement therefore concerns the definition of an operating business itself: MSCI emphasizes a company’s economic and financial characteristics to preserve the intended representation of its indexes, while Strategy maintains that its financial activities are entrepreneurial in nature. Its removal is consequently not a judgment on the legitimacy of its business model, but an assessment of its compatibility with the objectives of the relevant equity indexes.
The review also affects other companies pursuing similar strategies, including Metaplanet, the Japanese company that has made Bitcoin the centerpiece of its treasury policy. However, the methodology extends to businesses in other sectors when their economic and financial characteristics resemble those of investment vehicles. This confirms the broader scope of the new rules, even though companies whose activities depend heavily on accumulating and managing crypto-assets may be particularly exposed. The determining factor is the overall assessment of operating activities and financial structure, rather than the mere presence of Bitcoin on the balance sheet. An industrial company holding Bitcoin as a treasury reserve is therefore not automatically treated in the same way as a business whose economic model primarily revolves around managing that asset.
Implications for passive funds and capital raising
Strategy’s removal from MSCI indexes has direct consequences for investment vehicles tracking their composition. Index funds and physically replicated ETFs will need to adjust their portfolios, reducing the demand associated with products tracking the affected benchmarks. The scale of the resulting sales will depend on existing holdings and replication methods, while actively managed funds and vehicles tracking other indexes may continue holding Strategy shares. Some estimates have suggested potential sales amounting to several billion dollars, while Strategy stated that funds linked to MSCI indexes held approximately 3.1% of its outstanding common shares, based on figures included in its response to the consultation. However, the exclusion concerns the company’s equity securities and does not require it to liquidate its Bitcoin reserves, which would only be affected indirectly by any subsequent developments.
The more significant implications concern Strategy’s ability to raise capital, a central component of its business model. The company uses equity offerings and other financial instruments to finance Bitcoin accumulation, benefiting in part from demand among institutional investors. Index inclusion helps broaden this investor base through passive funds, while exclusion could reduce a structural source of demand and affect financing conditions. This does not prevent Strategy from raising additional capital, since other financing channels and investors not constrained by MSCI benchmarks remain available. The actual impact will therefore depend on Strategy’s ability to maintain investor interest and the sustainability of its financial strategy, without automatically resulting in a reduction of its Bitcoin holdings or its capacity to accumulate additional Bitcoin.
Distinguishing operating companies from investment vehicles
MSCI’s decision highlights the challenges involved in classifying companies developing business models centered on digital assets. Traditional equity indexes are generally designed to represent companies conducting operating businesses, distinguishing them from funds and other vehicles whose value primarily derives from investment management. Bitcoin treasury companies, however, may exhibit characteristics of both categories, combining commercial operations, asset management, capital raising, and the structuring of financial products. This overlap makes the distinction between an operating company and an investment vehicle less straightforward. In Strategy’s case, the issue is particularly relevant because Bitcoin accumulation has become an integral part of its business model rather than simply a treasury allocation decision.
MSCI’s approach seeks to preserve methodological consistency by preventing indexes designed to represent operating companies from including businesses that economically resemble investment vehicles. Strategy’s position, by contrast, highlights the risk that this distinction may fail to adequately recognize entrepreneurial activities based on capital management and financial innovation. The disagreement matters because index methodologies, although established by private organizations, can materially influence companies’ access to institutional investors. MSCI’s decision could also stimulate discussion among other index providers, without necessarily leading them to adopt similar criteria. For companies seeking to make Bitcoin a central component of their business models, index eligibility could therefore become an important consideration in financing strategies and balance sheet management.
Conclusions
Strategy’s exclusion from MSCI indexes marks a significant development in the relationship between traditional finance and companies that use Bitcoin as their primary treasury asset. The decision establishes a methodological distinction between operating businesses and entities with predominantly financial characteristics, applying it to business models that do not fit neatly into traditional classifications. The immediate consequences concern portfolios managed by passive funds tracking the affected indexes, while the effects on capital raising and corporate strategy will depend on additional factors. The exclusion does not directly alter Strategy’s Bitcoin reserves or prevent the company from accessing capital markets, but it demonstrates the influence of index methodologies on the allocation of institutional investment. The central question is whether traditional classification frameworks can adequately represent businesses that combine operating activities, asset management, and financial innovation. The evolution of criteria adopted by major index providers will help determine how these business models can continue to participate in equity markets.
