MSCI Maintains Inclusion of Digital Asset Treasury Firms but Introduces Freeze Policy

MSCI Inc. announced on January 6 that it will maintain the inclusion of Digital Asset Treasury Companies (DATCOs) in its global indexes for the February 2026 review. This decision prevents potential forced sell-offs that could have been triggered by index fund rebalancing. The company also introduced a freeze mechanism that halts the addition of new shares for DATCOs in its index calculations.

The move follows months of speculation and uncertainty about the future of firms like Strategy (formerly MicroStrategy), which have adopted a business model centered on acquiring digital assets such as Bitcoin. The freeze policy means that new equity issuance will not automatically generate buying pressure from index-tracking funds.

Market participants initially reacted positively to the news. Shares of Strategy rose more than 6% following the announcement, reflecting relief that the company would remain in MSCI's indices. However, the freeze mechanism introduced by MSCI is expected to alter capital-raising dynamics for DATCOs, which previously relied on index-driven demand for new equity shares.

Why Did MSCI Introduce a Freeze on DATCO Share Counts?

MSCI stated it will not increase the number of shares, Foreign Inclusion Factor, or Domestic Inclusion Factor for DATCOs included in its indices. This freeze effectively breaks the link between equity issuance and passive fund buying for companies like Strategy.

The decision is seen as a compromise. While DATCOs remain in the index, the freeze removes the automatic demand lever that previously helped these companies raise capital at scale. Analysts suggest that the change is likely to reduce the structural advantage these firms had over traditional asset classes such as Bitcoin ETFs.

How Did Markets React to the MSCI Announcement?

Strategy's stock price surged over 6% following the MSCI announcement, indicating that investors were relieved by the decision to keep DATCOs in the index. The company had been at risk of being excluded, which could have led to a forced liquidation event.

However, the market's optimism was tempered by the freeze mechanism. Investors realized that the structural support from index funds was no longer a given. This change could affect Strategy's ability to raise capital and expand its Bitcoin holdings, as the company had previously benefited from a guaranteed buy-in from passive investors.

What Are the Implications for Index Funds and Passive Investors?

Index funds and passive investors previously played a key role in supporting DATCOs like Strategy. When the company issued new shares, passive funds were required to buy a pro-rata portion to maintain index alignment.

With the freeze in place, this automatic demand is now absent. This change forces DATCOs to seek alternative sources of capital, such as private investors or discounts on new share issuance. For index funds, this means reduced exposure to DATCOs unless they choose to actively purchase shares outside of rebalancing cycles.

What Do Analysts Predict for the Long-Term Impact of the Freeze Policy?

Analysts suggest the freeze policy could lead to a shift in capital allocation from DATCOs to traditional Bitcoin ETFs. With the structural support from index funds removed, large investors may move their money into ETFs, which offer a more direct exposure to Bitcoin without the operational risks of a corporate entity.

Bull Theory estimated the freeze could cost DATCOs like Strategy up to $600 million in automatic buying pressure in a hypothetical $300-per-share scenario. This loss of liquidity could make future capital raises more challenging.

What Does the Future Hold for DATCOs in the Post-Freeze Environment?

The freeze policy marks a significant shift in the economics of the DATCO model. Companies like Strategy had relied on a "flywheel" effect, where new equity issuance led to guaranteed buying from index funds. This dynamic is now disrupted, forcing DATCOs to compete more directly with traditional investment vehicles.

The long-term success of DATCOs will depend on their ability to attract active investors and offer compelling valuations. While the freeze policy removes a key advantage, it also introduces more transparency and market discipline into the DATCO model.