Bitcoin's Role as a Corporate Treasury Asset in 2025: Assessing the Strategic and Financial Risks of Index Delisting

In 2025, Bitcoin's emergence as a corporate treasury asset has reached a critical inflection point. Companies like MicroStrategy, Riot Platforms, and Marathon Digital have staked their financial futures on Bitcoin, allocating billions to their balance sheets in pursuit of long-term value. Yet this bold strategy now faces a new existential threat: the potential exclusion of these firms from major stock indices. As index providers like MSCI review whether companies with significant crypto holdings should remain in equity benchmarks, the financial and strategic risks for firms like MicroStrategy are becoming impossible to ignore.

Index Providers Reassessing Crypto Holdings

The criteria for index inclusion have traditionally focused on liquidity, market capitalization, and governance standards. However, the rise of "digital asset treasury" (DAT) firms-companies holding over 50% of their balance sheets in Bitcoin-has forced index providers to reconsider their definitions of "operating businesses." According to a report by Yahoo Finance, MSCI is actively reviewing whether DATs should be excluded from its major indexes, citing concerns that these firms resemble investment vehicles rather than traditional corporations. This move could trigger massive passive fund outflows, as index-linked funds are required to divest holdings that no longer meet inclusion criteria.

The stakes are high. MSCI's review includes 38 companies, including well-known names like Strategy (MicroStrategy) and Riot Platforms. A final decision is expected by January 15, 2025. If implemented, the exclusion would not only reduce these firms' visibility but also erode institutional ownership, as passive investors account for a significant portion of trading volume.

Financial and Strategic Risks of Delisting

Delisting from major indices carries cascading consequences. For starters, it signals a loss of credibility with institutional investors, who often rely on index inclusion as a proxy for financial stability. Data from recent cases illustrates this risk. Cheer Holding (CHR) and Avalon GloboCare (ALBT), while not DATs, received Nasdaq delisting notices for failing to meet minimum stock price and equity requirements. Cheer Holding, for instance, was given until December 1, 2025, to appeal its delisting after its shares traded below $0.10 for ten consecutive days. Such scenarios highlight how index providers prioritize financial metrics over business models, creating a Catch-22 for companies with volatile assets like Bitcoin.

For DATs, the risks are amplified. If MSCI excludes these firms, they could face:
1. Passive Fund Outflows: Index-linked funds managing trillions in assets would be forced to sell shares, exacerbating downward pressure on stock prices.
2. Increased Borrowing Costs: Reduced institutional ownership could lead to wider bid-ask spreads and higher cost of capital.
3. Operational Challenges: Companies reliant on stock-based compensation or equity financing may struggle to attract talent or raise capital.

Case Studies: Lessons from the Edge

While no DAT has been delisted yet, recent cases offer cautionary tales. Cheer Holding's delisting notice underscores how even minor financial missteps-like a stock price dipping below $0.10-can trigger a crisis. The company's scramble to appeal Nasdaq's decision by December 1, 2025, illustrates the urgency of maintaining index compliance. Similarly, Avalon GloboCare's negative stockholders' equity of $3.89 million highlights the fragility of firms with weak balance sheets, a risk that DATs face as Bitcoin's price volatility impacts their reported equity.

Meanwhile, Strategy's CEO Michael Saylor has remained "unwavering" in his Bitcoin convictions, even as the company's stock faces potential exclusion. This defiance, while admirable, raises questions about the long-term viability of a strategy that prioritizes crypto over traditional financial metrics.

Implications for MicroStrategy and the DAT Sector

MicroStrategy's aggressive Bitcoin accumulation has made it a bellwether for the DAT sector. If MSCI excludes the company, it could lose billions in institutional capital overnight. For example, a 2024 study by Bloomberg estimated that a 10% decline in institutional ownership of DAT stocks could reduce their market capitalization by up to 30%.

This is not hypothetical: the mere possibility of exclusion has already caused volatility in DAT stocks, with Strategy's shares down 15% in October 2025.

Strategically, DATs must now balance their Bitcoin bets with index provider expectations. Options include:
- Diversifying Balance Sheets: Reducing crypto exposure to below 50% to retain index inclusion.
- Lobbying Index Providers: Arguing that Bitcoin holdings represent a strategic hedge rather than speculative investment.
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- Creating New Indices: Partnering with crypto-friendly providers to build alternative benchmarks.

Conclusion

Bitcoin's role as a corporate treasury asset is here to stay, but its integration into traditional finance remains contentious. As index providers recalibrate their criteria, DATs like MicroStrategy must navigate a precarious tightrope between innovation and compliance. The coming months will test whether the financial system can accommodate a new asset class-or if Bitcoin's corporate adopters will be forced to build their own ecosystem. For investors, the lesson is clear: the risks of index delisting are not just technical-they are existential.