Bitcoin News Today: Is It a Company or a Fund? MSCI's Crypto Reclassification Dilemma

MSCI is set to decide by January 15, 2026, whether to reclassify companies holding large reserves of Bitcoin, Ethereum, and Solana as investment funds rather than traditional businesses, a move that could remove them from major equity indices like the MSCI USA and Nasdaq 100. The index provider initiated a consultation in October 2025, seeking feedback on whether firms with over 50% of their balance sheets in crypto assets should be treated differently. Companies like MicroStrategy (now Strategy Inc.) and Riot Platforms have drawn particular scrutiny, with critics arguing their operations resemble passive funds more than operating businesses.

Michael Saylor, CEO of Strategy, has pushed back against the reclassification, emphasizing that his firm is a "publicly traded operating company with a $500 million software business" rather than a fund or trust according to reports. He argues that Bitcoin is a form of "productive capital" used to build the "world's first digital monetary institution," distinguishing his company's innovative treasury strategy from passive asset-holding models according to analysis. However, analysts like Charlie Sherry of BTC Markets note that MSCI's criteria focus on risk management, aiming to align indices with predictable business fundamentals. "When most of the value comes from a balance-sheet asset rather than the underlying business, MSCI treats that as outside the scope of a traditional equity benchmark," Sherry said according to market analysis.

The potential exclusion carries significant financial risks. JPMorgan estimates that if MSCI proceeds, Strategy alone could face $2.8 billion in passive fund outflows, with broader implications if other index providers follow suit. Strategy's market capitalization is currently $57 billion, with 649,870 Bitcoin holdings valued at $48.37 billion, leaving little margin as Bitcoin prices trade below its average cost basis. The company's valuation premium—once a key driver of its "sell stock, buy Bitcoin" model—has collapsed, trading at just 1.1 times its net asset value according to financial analysis.

The debate extends beyond Bitcoin. Ethereum and Solana treasury firms, such as Tom Lee's BitMine, may also face reclassification, though their active staking and validator operations could differentiate them from passive funds according to reports. Meanwhile, index providers like S&P have shown varied approaches. While S&P currently includes Strategy in its indices, its methodology could evolve, creating uncertainty for crypto treasury strategies.

Clarity in classification rules, however, may ultimately benefit the sector. Sherry argues that defined frameworks reduce uncertainty, even if short-term impacts are painful. The outcome of MSCI's decision will set a precedent for how traditional finance classifies crypto-focused companies, influencing institutional confidence and market dynamics.