Michael Saylor Reaffirms Bitcoin Commitment as MSCI Scrutiny Continues

TLDR

• Michael Saylor defends Strategy’s Bitcoin-backed treasury model amid MSCI scrutiny.
• Strategy launched $STRC, a Bitcoin-backed treasury credit offering with monthly yields.
• Saylor stresses Strategy is a software company, not a fund or trust, despite MSCI concerns.
• MSCI may remove Strategy from major indices over Bitcoin treasury classification.

Michael Saylor, executive chairman of Strategy, recently reaffirmed his company’s commitment to Bitcoin as it faces scrutiny from MSCI over its inclusion in major indices. Saylor emphasized that Strategy is not a fund, trust, or holding company, despite MSCI’s classification of firms with large Bitcoin holdings as such. This comes amid concerns that Strategy’s heavy Bitcoin reserves might lead to its exclusion from indices like the Nasdaq 100.

Strategy’s Bitcoin-Focused Approach

Saylor clarified that Strategy operates as a publicly traded company with a $500 million software business. He explained that the company uses Bitcoin as productive capital, a unique treasury strategy. Unlike passive investment funds or holding companies, which simply hold assets, Strategy actively creates, structures, issues, and operates its business model.

Saylor highlighted the company’s achievements this year, including five public offerings of digital credit securities, totaling over $7.7 billion in notional value. The most recent offering, STRE, raised $704 million to further purchase Bitcoin.

Bitcoin-Backed Treasury Instruments

Saylor also highlighted the recent launch of Stretch, a Bitcoin-backed treasury credit instrument. This innovative product provides institutional and retail investors with a variable monthly USD yield.

Stretch represents a significant step for the company in its goal to integrate Bitcoin into the financial mainstream. With this product, Strategy aims to bring Bitcoin-backed financial instruments to a wider market, distinguishing itself from typical investment vehicles that passively hold assets.

MSCI’s Review and Potential Consequences

MSCI, a global index provider, has initiated a consultation to review whether companies like Strategy, which hold over 50% of their reserves in Bitcoin, should remain eligible for inclusion in major indices.

Investment funds and trusts, which typically hold assets without actively managing them, are not eligible for inclusion in indices such as the MSCI USA and MSCI World indices. If MSCI decides that companies with Bitcoin-heavy reserves resemble investment funds, Strategy may face removal from such indices.

Saylor remained confident about his company’s long-term strategy. In a statement posted on X (formerly Twitter), he reiterated that Strategy’s focus on innovation in both capital markets and software is what sets it apart. He also stressed that index classification does not define the company’s mission, which is to build a digital monetary institution based on sound money principles and financial innovation.

Stock Performance Amid Concerns

Amid these ongoing discussions, Strategy’s stock has seen a decline. Data from TradingView shows that the stock is currently trading around $174, down almost 2% on the day and over 11% in the past five days.

Despite this, Saylor remains firm in his stance that the company’s strategy is long-term, with a clear commitment to Bitcoin as a cornerstone of its financial model.

MSCI is expected to make a final decision on its review by January 15, 2025. The outcome will determine whether Strategy will remain on key indices or face removal due to its Bitcoin-centric approach.

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