MSCI adopts index exclusion rules that could oust Strategy

Index provider MSCI has adopted new rules that could lead to Strategy, Metaplanet and Upexi being removed from its global indexes, while leaving several other crypto treasury companies facing potential exclusion. 

MSCI said Thursday it will adopt a methodology proposed in August that would make “non-operating companies” ineligible for inclusion in the MSCI Global Investable Market Indexes. 

MSCI previously identified Strategy (MSTR) among the companies that would be deleted from the indexes under the “non-operating companies methodology.” Sharplink, Inc (SBET), Ton Strategy Company (TONX), Solana Company (HSDT) and DeFi Development Corp. (DFDV) are among companies that would be put on a “watchlist” for potential removal. 

Removal could force funds tracking MSCI indexes to sell the affected companies’ shares, potentially putting pressure on stock prices and reducing passive investment demand.

“It removes a company from the default portfolios of tens of millions of people who never chose to remove it,” said Conner Brown, executive director of the Bitcoin Policy Institute in September, who was describing the consequences of broad-market index exclusion, with Strategy as the example. 

Under the new methodology, MSCI will assess companies based on their operating assets and five financial ratios. Companies failing at least four of the five tests could be deemed ineligible. Existing companies in the index must generally fail the screening process over two annual reporting periods before removal. 

The final list of companies to be removed will be released on Nov. 11 and will take effect on Nov. 30, 2026, according to MSCI. 

JPMorgan analysts previously estimated that Strategy’s exclusion from MSCI indexes could trigger roughly $2.8 billion in selling. That estimate concerned MSCI’s earlier digital asset proposal, rather than the rules adopted Thursday.

In August, Strategy opposed the changes but also played down the potential disruption, saying funds tracking MSCI’s Global Investable Market Indexes hold approximately 13 million shares, representing 3.1% of its basic shares outstanding. The company said those holdings amount to less than one day’s trading volume.