Bitwise Slams MSCI Rule, Backs Strategy’s Inclusion in Index
Bitwise just threw a punch at MSCI's rulebook—and crypto investors are cheering.
Why the index giant's criteria might be missing the point
Bitwise isn't just asking for a seat at the table; it's arguing the table itself is outdated. The firm's latest push highlights a glaring gap between traditional finance's rigid frameworks and the dynamic reality of digital assets. Their strategy, built for this new era, doesn't fit the old molds—and Bitwise says that's the rule's problem, not theirs.
This isn't a request; it's a challenge to the system.
The move signals a broader shift: institutions are done waiting for permission. They're building the vehicles they need and then demanding the market recognize them. It’s a page from the classic finance playbook—create the product, then lobby for the stamp of approval. Sometimes, the most innovative strategy is just good old-fashioned regulatory arbitrage with a crypto twist.
The clock is ticking on legacy frameworks. As strategies evolve faster than the rules meant to contain them, the pressure mounts on index providers to adapt or become irrelevant. After all, in the race for the future of finance, the biggest risk isn't being early—it's being wrong.
The argument for index neutrality
Bitwise expressed DEEP concern over MSCI’s plan to exclude Strategy from its widely followed Global Investable Market Indexes (GIMI), saying, “We are deeply disappointed by MSCI’s proposal to remove Strategy from its Global Investable Market Index. The index is intended to faithfully reflect the market, not to evaluate the merits of specific business models, and should maintain neutrality.”
Bitwise also opposed the idea that digital asset treasury (DAT) businesses are so easily replaceable with traditional financial instruments. The company argued that “Exchange traded products cannot replicate the way Strategy operates, and that Strategy has also created value for shareholders.”
The general criticism made by Bitwise here is that MSCI’s rule change proposal will eventually affect MSCI negatively because “the rule change proposed by MSCI deprives investors of the opportunity to invest in the digital asset class and its industry leaders, thereby putting investors at a disadvantage.”
Strategy’s initial response
Strategy previously launched a formal defense against MSCI’s proposed exclusion of Digital Asset Treasury (DAT) firms from its Global Investable Market Indexes. The firm’s chairman, Michael Saylor, has been in direct talks with MSCI, arguing that the proposed “50% rule” is discriminatory, demanding that index standards must remain “neutral, consistent, and reflective of global market evolution.”
The pushback has support from other firms, including investment company Strive, which also urged MSCI to rethink the plan. The high stakes of this decision are shown by analysis from firms like JPMorgan, which noted that the risk of exclusion and the associated potential for billions in passive fund sales have already been largely reflected in Strategy’s stock price since the consultation began.
MSCI’s proposed ‘50% Rule’
The controversy arises from an MSCI extensive review on considerations for including Digital Asset Treasury (DAT) stocks within its Global Investable Market Indexes. The review, which began back in October, targets companies whose operations are distinguished mainly by massive holdings of digital assets, with Strategy’s Bitcoins being among them.
MSCI is said to be pondering a “50% rule” under which it will exclude stocks belonging to companies that hold digital assets amounting to 50% or more of its total assets, as it considers that these businesses operate more as investment holding entities and less as operating businesses.
However, Strategy has disputed this manner of classification, as it considers itself an operating business that uses its own Bitcoins in generating a return on equity for shareholders.
Future market implications
The implications of an index removal review are considerable because large index funds follow the MSCI index series. A removal WOULD imply possible mandatory sales of Strategy stocks by large index funds, amounting to billions of dollars, based on some investment house forecasts.
The MSCI decision on January 15 promises to be a defining period for the digital assets sector. A successful exemption will be an extremely influential determinant on how global index compilers will end up defining and listing these firms with clearly tangible digital assets. It may have a potentially damaging impact on encouraging passive investment into the sector, as other index compilers might follow suit.
On the other hand, if MSCI were to turn around and make changes to its criteria with Strategy included, then it would be seen as an indication that there is acceptance for the business models adapted from the digital economy. Irrespective of which side it goes, it seems that market implications have already been factored into a large extent regarding the implications from MSCI, as suggested by Bitwise CIO Matt Hougan.
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