MSCI's New Index Screen Raises Concerns for Bitcoin Treasury Holders

MSCI has proposed a new index eligibility screen for non-operating companies that could impact Bitcoin treasury holders. The proposal, set to be finalized by October 16, would assess financial ratios on companies that fail an initial operating assets test.

A company would fail the second screen if flagged on at least four of five financial ratios. MSCI simulated results show Strategy, Metaplanet, and Yellow Cake, a uranium investment company, could be removed from indexes. However, existing members have a two-period buffer before removal.

Strive's CEO Matt Cole raised concerns in a letter dated December 4, arguing that Bitcoin treasury companies can operate structured-finance businesses and investors should choose tailored index screens. The new proposal is not a direct result of this objection but rather a broader study on non-operating companies.