The Material Market Risk for Bitcoin-Treasury Firms as Major Index Providers Reconsider Inclusion

The Bitcoin-treasury model-where companies accumulate Bitcoin as a core asset-has long been a speculative bet on the future of digital assets. However, the landscape is shifting rapidly. Major index providers like MSCI, S&P, and FTSE are now reevaluating the inclusion of these firms in their indices, signaling a potential seismic shift in capital flows and valuations. This analysis unpacks the material risks posed by these developments, drawing on recent regulatory signals, historical precedents, and market data to quantify the stakes for investors.

The Proposed Exclusion Criteria: A Threshold for Disruption

Index providers are tightening their inclusion criteria for companies with significant Bitcoin exposure. MSCI, for instance, has proposed excluding firms where digital assets constitute 50% or more of total assets, framing them as "investment funds" rather than operating businesses. This rule change, under consultation until December 31, 2025, could be finalized by January 15, 2026, with implementation slated for February 2026. The rationale? Concerns over volatility and index representativeness, as highlighted by Strategy, a Bitcoin-treasury firm, which warned that such firms could be "whipsawed on and off" indices due to market conditions.

The stakes are enormous. If enacted, excluded companies would lose access to approximately $15 trillion in passive capital tracking MSCI indices. This is not hypothetical: S&P and FTSE are also reportedly considering similar moves. The ripple effect would extend beyond MSCI, creating a domino effect across global indices.

Historical Precedents: Capital Outflows and Valuation Impacts

History offers a cautionary tale. In April 2025, U.S. equity funds faced $14.06 billion in outflows over a single week, the largest since December 2024. This trend was driven by a combination of trade policy volatility, geopolitical realignment, and valuation disparities. For Bitcoin-treasury firms, the risk is amplified. These companies already trade at significant premiums to net asset value (NAV), a dynamic that has proven fragile. In 2025, only one Bitcoin-treasury firm, The Blockchain Group, outperformed the S&P 500, while others like Strategy and Metaplanet saw stock prices plummet as reported by Yahoo Finance.

The concentration risk in the S&P 500-now dominated by mega-cap tech and AI firms-further exacerbates the problem. If Bitcoin-treasury firms are excluded, index-tracking funds would be forced to divest, triggering sharp sell-offs. The ECB's Financial Stability Review notes that such exclusions could lead to "notable shifts" in capital allocation, with investors favoring cheaper assets in Europe and APAC. For firms reliant on institutional inflows, the loss of index inclusion could be catastrophic.

Quantifying the Risk: A $15 Trillion Leverage Point

The potential capital outflow from MSCI exclusions alone is staggering. Passive funds, which dominate global markets, are legally obligated to mirror index compositions. If a firm is excluded, these funds must sell its shares, creating downward pressure on valuation. This dynamic was evident in 2025, when U.S. equity funds saw $15 billion in outflows over three consecutive weeks. For Bitcoin-treasury firms, which often trade at NAV premiums of 200% or more, a forced liquidation could trigger a "death spiral" of falling prices and declining institutional interest.

Moreover, the valuation disparities between U.S. tech stocks and global peers are already driving capital reallocation as noted by the ECB. Exclusion from major indices would accelerate this trend, as investors seek more stable, diversified portfolios. The result? A self-reinforcing cycle of declining valuations and reduced liquidity for Bitcoin-treasury firms.

Conclusion: A Tipping Point for the Bitcoin-Treasury Model

The proposed index exclusions represent a critical inflection point. For years, Bitcoin-treasury firms thrived on speculative premiums and passive capital flows. But as index providers recalibrate their criteria, the model's vulnerabilities are laid bare. The $15 trillion in passive capital tied to MSCI indices is not just a number-it's a lever that could destabilize the entire sector.

Investors must now weigh the risks of holding these firms against the potential for forced divestments and valuation collapses. The lesson from 2025 is clear: in a market increasingly driven by index rules and passive flows, being excluded from a major index is not just a reputational hit-it's a financial catastrophe.