MSCI's Move Reshapes Bitcoin Treasury Dynamics for Strategy

MSCI Inc. has decided to retain digital asset treasury companies (DATCOs) in its global equity indexes for the February 2026 review, sparing firms like Strategy (formerly MicroStrategy) from potential expulsion. The announcement addressed concerns from institutional investors, who had questioned whether DATCOs should be treated like investment funds. However, MSCI froze index weightings for newly issued shares, disrupting a prior automatic demand loop from passive funds.

The decision averted fears of a forced sell-off in crypto-linked equities. Strategy's stock price surged over 6% in after-hours trading following the news. The company had issued more than $15 billion in new shares in 2025 to fund Bitcoin acquisitions, but the new policy curtails future passive demand for its shares. Analysts warn this could lead to significant stock price corrections if Strategy attempts large-scale equity issuance in 2026.

Why Did This Happen?

MSCI stated it plans to launch a broader consultation on the treatment of non-operating companies, aiming to distinguish between investment-like entities and operating businesses. The index provider acknowledged feedback from institutional investors, who had raised concerns about DATCOs' resemblance to investment funds. This consultation period provides time to evaluate additional criteria for index eligibility, such as financial-statement-based indicators.

How Did Markets React?

Market analysts noted the immediate relief in Strategy's stock price, but the longer-term implications are more complex. JPMorgan previously warned that exclusion could trigger $3 billion to $9 billion in passive selling of MSTR shares. While that risk has been neutralized, the upside of guaranteed index-linked demand is now gone. This structural shift forces Strategy to pivot toward active investors, hedge funds, and retail investors to absorb new equity supply.

The move also alters competitive dynamics for asset management firms. As US spot Bitcoin ETFs mature and gain institutional interest, they increasingly compete with companies like Strategy. These ETFs offer lower operational risk and more stable pricing, potentially redirecting capital away from leveraged corporate equity into more traditional investment vehicles. According to analysis, this could reshape the competitive landscape.

What Are Analysts Watching Next?

Analysts are closely monitoring how Strategy adapts to this new funding environment. In a hypothetical scenario, a treasury company issuing 20 million new shares would previously have received automatic demand from index-linked funds. Under the new rules, that passive buying pressure disappears entirely. Bull Theory estimated this could eliminate $600 million in automatic demand at a $300 per share price point.

The shift also raises questions about the long-term viability of the "infinite money loop" that previously supported Strategy and similar firms. Without the guaranteed buy-in from index funds, Strategy may struggle to maintain its aggressive Bitcoin accumulation strategy while managing its stock price volatility.

Investors are advised to watch for potential capital rotation from corporate equities into Bitcoin ETFs. The new rules may level the playing field between traditional asset management products and corporate-backed Bitcoin holdings. With Strategy's ability to raise capital constrained, the risk of forced liquidation and price corrections during dilution events has increased.

Looking ahead, MSCI's broader consultation on non-operating companies may further clarify how DATCOs will be treated in the future. This could influence the classification of Bitcoin-heavy firms and their inclusion in major equity benchmarks. Until then, Strategy and other DATCOs will continue navigating a market environment where the structural bid from index funds is no longer a guaranteed tailwind.