Major stock indices provider Morgan Stanley Capital International (MSCI) has decided not to remove digital-asset treasury companies (DATs) from its benchmark indexes for now.
The move represents a welcome reprieve for crypto-related equities such as Michael Saylor’s Strategy, which holds a large pile of Bitcoin on its balance sheet but does not directly operate in the blockchain industry.
MSCI Shelves Plan On Dropping Crypto Treasuries
MSCI said it will not proceed with a proposal to change how it treats companies with significant digital asset exposure.
MSCI said in October that it was examining whether digital asset treasury companies should remain in its Global Investable Market Indexes (GIMIs) ahead of an index rebalancing event in February.
“For the time being, the current index treatment of DATCOs identified in the preliminary list published by MSCI of companies whose digital asset holdings represent 50% or more of their total assets will remain unchanged,” MSCI wrote in a Tuesday statement.
The announcement was one of the most-anticipated bullish triggers for DATs, as their formal exclusion could have seen Strategy and other public firms emulate the company’s Bitcoin approach and lose billions of dollars in passive capital inflow.
Strategy, the largest crypto treasury company with 673,783 Bitcoin, described the decision as “a strong outcome for neutral indexing and economic reality.”
While MSCI decided not to immediately boot DAT investment companies, concerns linger over whether these firms will continue to qualify for index inclusion in the future.
The index provider plans to conduct a broader review to distinguish between investment companies and other companies that hold digital assets as part of their core operations.
”This broader review is intended to ensure consistency and continued alignment with the overall objectives of the MSCI Indexes, which seek to measure the performance of operating companies and exclude entities whose primary activities are investment-oriented in nature.”
Shares of MSTR surged circa 6.8% to $168.6 in after-hours trading following the MSCI announcement, according to Yahoo Finance data.
With the immediate pressure now alleviated, capital might start to flood back into the crypto treasury companies, possibly boosting market sentiment. Other DATs, including Tom Lee’s Bitmine Immersion, Sharplink, and Twenty One Capital (XXI), also enjoyed notable gains in after-hours trading.
Source: https://zycrypto.com/win-for-bitcoin-giant-strategy-as-msci-pauses-decision-to-exclude-digital-asset-treasury-firms-from-indexes/
