MSCI Rule Puts Strategy at Risk

The MSCI index provider's proposed test for 'non-operating companies' has sparked concern that it could remove Strategy, Metaplanet, and Yellow Cake from its indexes. According to a paper by the Bitcoin Policy Institute, this would impact $2.8 billion in funds tracking MSCI's benchmarks.

The proposal centers on whether a company has enough 'operating assets,' which is not a standardized balance-sheet category under U.S. GAAP or IFRS. This means that companies with significant investments in digital assets, such as bitcoin, could be excluded from the indexes.

Brown's paper argues that MSCI's simulated deletions also include Yellow Cake, a company that holds physical uranium. The proposal's logic could also reach companies building satellites or major lithium mines, potentially impacting trillions of dollars mechanically following an index.