Hardware Ready Ready to Bench?
On October 15, index provider MSCI announced the final adoption of a new framework intended to exclude companies classified as “non-operational” from investable global equity indices. The decision renders ineligible companies whose balance sheets are dominated by a single asset, a characteristic typical of so-called Bitcoin treasury firms like Strategy and Metaplanet. The new rules will take effect with the index review scheduled for November 30, while the definitive list of affected companies will be published on November 11. Under the new MSCI index rules, Strategy and Metaplanet are among the companies affected.
Why it matters
This change alters market dynamics for companies that have adopted a business model based on massive cryptocurrency holdings. In the past, MSCI had introduced provisional measures last year, freezing index adjustments for companies with over 50% of assets in crypto. The new system replaces this temporary approach with a stricter structural test. If a company does not pass the initial verification on operating assets, it is subjected to screening based on five financial ratios; if it fails at least four, it becomes ineligible for inclusion or retention in the indices.
Removal from global benchmarks could reduce passive demand from funds that replicate these indices. Michael Saylor, an executive at Strategy, reacted by calling the rule “discriminatory,” arguing that it would lead to his company’s removal from major benchmarks. However, MSCI has introduced protection mechanisms to limit turnover: current index components will only be removed if they fail the screening in the last two consecutive annual periods.
The numbers
Sources agree on the technical parameters of the new methodology. The minimum threshold for declaring a company ineligible is failing four out of five financial ratios. For companies already present in the indices, the necessary condition for exclusion is failing the screening in the last two consecutive annual reporting periods. The previous 50% digital asset threshold, which triggered temporary freezes, has been abolished with the adoption of this new framework.
A provisional list based on data as of September 30 includes Strategy, Metaplanet, Upexi, Yellow Cake, and Skel Fjarfestingafelag. Other sources also cite SharpLink on the watchlist, bringing the total number of monitored companies to approximately 17. During consultation phases, MSCI tested the screening on the ACWI IMI index using May data, identifying Strategy, Yellow Cake, and Metaplanet as potential eliminations.
What remains to be understood
The specific impact on the share prices of affected stocks is not yet known, nor is the magnitude of passive demand that could be interrupted. The actual exclusion has not occurred, but it is a potential consequence linked to the application of the new rules starting in November. The final list of removed or excluded companies will only be available after November 11, when the definitive screening results are published.
Sources: CoinDesk, Decrypt, Bitcoin Magazine, Unchained, Protos.
This article is for information purposes only and does not constitute financial advice or an investment recommendation.
* Content created with the assistance of artificial intelligence systems.