MSCI and the Shifting Landscape of Global Index Investing: Implications of Potential Bitcoin Treasury Exclusions

The global index investing landscape is undergoing a seismic shift as MSCI, one of the world's most influential index providers, grapples with the implications of cryptocurrency treasury activities in its benchmark indices. With Bitcoin's role in corporate treasuries evolving from speculative curiosity to a strategic asset allocation tool, MSCI's recent proposals to exclude companies with significant digital asset holdings-such as Strategy (MSTR)-highlight a critical juncture for both index resilience and market dynamics.

MSCI's Evolving Index Strategy: From Inclusion to Exclusion

MSCI's index composition strategies have long been shaped by its mandate to reflect investable markets while maintaining alignment with traditional financial standards. As of late 2025, the firm is consulting on a proposal to exclude companies where digital asset holdings constitute 50% or more of total assets, arguing that such firms resemble investment funds, which are currently ineligible for index inclusion. This threshold, if adopted, would directly impact firms like MSTR, whose treasury model relies heavily on Bitcoin accumulation.

The consultation, open until December 31, 2025, reflects MSCI's attempt to balance innovation with institutional caution. By proposing a clear asset-based threshold, MSCI aims to preserve the integrity of its indices while addressing concerns about volatility and liquidity risks associated with digital assets. However, this move also signals a broader skepticism toward passive Bitcoin-hoarding models, which have struggled to adapt to market volatility.

Market Reactions and the Case of Strategy (MSTR)

The potential exclusion of MSTR from major indices has already triggered significant market reactions. According to a report by Investing.com, MSTR's stock price has plummeted nearly 60% over four months, with its price-earnings ratio now at a historically low 8.67. Analysts at JP Morgan attribute this decline not solely to Bitcoin's price fluctuations but to fears of index exclusion, which could trigger up to $8.8 billion in outflows if followed by other index providers.

This scenario underscores the symbiotic relationship between index inclusion and corporate valuation. For companies like MSTR, being part of major indices is not just a reputational milestone-it's a lifeline for liquidity and institutional access. The reputational damage from exclusion could exacerbate existing challenges, such as limited hedging strategies and exposure to Bitcoin's price swings which have been widely reported.

MSCI's Financial Resilience and Institutional Confidence

Despite these challenges, MSCI itself appears well-positioned to navigate the evolving landscape. The firm recently announced a $3.0 billion share repurchase program and a quarterly dividend of $1.80 per share, reflecting strong financial performance and board confidence. Earnings per share (EPS) of $4.47 in Q3 2025 exceeded analyst expectations, and institutional ownership remains robust at 89.97%, with entities like Meeder Asset Management and Banque Transatlantique increasing their stakes as reported in the latest filing.

This institutional confidence contrasts with the caution of firms like Nomura Asset Management, which reduced its MSCI position by 23.9% in Q2 2025. Such divergent investor behavior highlights the complexity of asset allocation shifts in 2025, where MSCI's role as both a market barometer and a corporate entity is under scrutiny.

Broader Implications for Global Markets

MSCI's proposed changes also ripple beyond individual companies. South Korea's push for MSCI index inclusion-through measures like a 24-hour FX market and offshore won settlement system-demonstrates how index eligibility remains a catalyst for structural market reforms as noted by South Korean media. Meanwhile, the broader real estate sector, as tracked by MSCI's global real estate index, continues to face corrections, with property prices 9.4% below three-year highs as of August 2025 according to Bloomberg. These trends suggest that MSCI's index strategies are not just reacting to cryptocurrency dynamics but are part of a larger recalibration of global asset classes.

Conclusion: Navigating the New Normal

MSCI's resilience in 2025 hinges on its ability to adapt to a dual challenge: managing the risks of digital asset integration while maintaining its role as a trusted index provider. The proposed exclusion of Bitcoin treasury firms reflects a pragmatic approach to preserving index stability, even as it risks alienating a segment of the market that views cryptocurrencies as a legitimate asset class.

For investors, the key takeaway is that MSCI's evolving strategies will continue to shape capital flows and corporate behavior. While the firm's financial strength and institutional backing suggest it is well-equipped to weather these shifts, the long-term impact of its decisions on market innovation and liquidity remains to be seen. As the consultation period closes in December 2025, all eyes will be on MSCI's final rulings-and the broader market's response.