Bitcoin News Today: MicroStrategy Warns MSCI Overseers: Crypto Exclusion Threatens U.S. Tech Supremacy

National Security at Risk If MSCI Excludes Crypto Treasuries, Warns Bitcoin Giant Strategy

MicroStrategy, now known as Strategy, has issued a strong warning to MSCI, arguing that a proposed rule to exclude digital asset treasury companies from its indexes could harm U.S. national security. The company, which holds over $61 billion in Bitcoin, submitted a detailed 12-page letter to MSCI, urging it to reconsider its decision. Strategy claims the proposal would undermine the federal government's pro-innovation policies and weaken U.S. leadership in the digital asset sector according to Strategy's letter.

The index provider is currently consulting on whether to reclassify public companies with more than 50% of their assets in digital currencies as investment funds, effectively removing them from major benchmarks. Strategy argues the threshold is arbitrary and fails to account for the nature of its business model, which it says actively uses Bitcoin to generate returns for shareholders, unlike passive investment vehicles according to Strategy.

The potential exclusion has already sent shockwaves through the market. JPMorgan analysts estimated that Strategy could face outflows of up to $2.8 billion if the rule is adopted. The company's stock has fallen nearly 53% in six months amid a broader slump in crypto-related firms according to Nasdaq reporting.

Why the Standoff Happened

Strategy's pushback comes as MSCI faces growing pressure to modernize its index criteria to reflect the evolving financial landscape. The index provider has cited concerns about the volatility and regulatory uncertainty surrounding digital assets as justification for the proposed changes. However, Strategy argues that such a move would be inconsistent with how other asset-heavy industries are treated, such as oil and timber companies according to Bloomberg reporting.

The debate has taken on additional geopolitical dimensions. Strategy's letter invokes the Trump administration's emphasis on digital innovation, warning that excluding crypto treasuries would contradict the government's national security goals. It also references the recent GENIUS Act, which aims to strengthen oversight of stablecoins while promoting U.S. technological leadership according to Decrypt reporting.

What This Means for Investors

The outcome of MSCI's decision could reshape how investors access exposure to digital assets. If Strategy is removed from major benchmarks like the MSCI USA Index, it could trigger billions in passive outflows and reduce the company's market visibility. This would not only affect Strategy but also send a signal to other firms considering investing in crypto treasuries according to Cryptonews reporting.

For now, the market appears to have priced in the risk of exclusion. JPMorgan analysts note that the potential outflows are already reflected in Strategy's stock price, meaning any final decision could act as a positive catalyst if the company avoids removal according to Bloomberg reporting. However, the broader impact on the crypto market remains uncertain, especially if other index providers follow MSCI's lead.

Risks to the Outlook

Strategy is not the only firm raising concerns. Vivek Ramaswamy's Strive Asset Management, the 14th-largest corporate Bitcoin holder, has also submitted a letter to MSCI. Strive argues that the proposal would distort the principles of passive investing by injecting policy judgments into index construction according to Forbes reporting.

The debate also highlights the challenges of applying traditional financial models to a rapidly evolving asset class. Strategy points out that its business model-issuing structured notes and equity instruments backed by Bitcoin-differs fundamentally from that of a passive fund. This distinction, the company argues, is critical to its ability to innovate and adapt to technological changes in the crypto space according to Bloomberg reporting.

Analysts Are Watching

MSCI has yet to finalize its decision, with a deadline of January 15. Meanwhile, the company's CEO, Henry Fernandez, has continued to build his stake in MSCI shares, purchasing $6.7 million worth of stock in late December according to Investing.com reporting. Analysts are watching closely for signs of how MSCI will balance regulatory pressures, market demands, and its own role as a neutral index provider.

UBS has raised its price target for MSCI to $710, citing strong index subscription sales and a positive outlook. However, the firm acknowledges that any major changes to index inclusion criteria could affect MSCI's long-term reputation for neutrality according to Financial Times reporting.

As the debate continues, Strategy and other digital asset treasuries are betting that the market-and regulators-will ultimately embrace their vision of a more diversified and innovative financial system.