MSCI has proposed removing Bitcoin treasury companies Strategy and Metaplanet from its indexes, a move that could redirect passive investment flows and shake up stocks that have become proxies for Bitcoin exposure. The proposal, reported this week, targets two of the most prominent corporate holders of the cryptocurrency.
The two companies in the crosshairs
Strategy and Metaplanet have built their balance sheets around Bitcoin, buying the asset in large quantities and holding it as a treasury reserve. That strategy has made their share prices move in tandem with the cryptocurrency, attracting investors who want Bitcoin exposure without owning the coin directly. MSCI's proposal would strip both companies from its indexes, which are used as benchmarks by a wide range of exchange-traded funds and institutional portfolios.
Passive money at stake
The impact could be significant. Index funds and ETFs that track MSCI benchmarks are required to hold the same stocks as the index. If Strategy and Metaplanet are removed, those funds would be forced to sell their positions, potentially triggering a wave of selling pressure. The proposal could also affect other companies that have adopted similar Bitcoin treasury strategies, as investors reassess the risks of holding such stocks in passive portfolios.
Volatility risk for holders
The removal may lead to volatility in stocks heavily reliant on asset holdings. Without the steady buying from index funds, these stocks could see wider price swings and thinner liquidity. For investors who have used these companies as a proxy for Bitcoin, the change could force a rethink of how to gain exposure to the cryptocurrency.
The review ahead
MSCI has not announced a timeline for a final decision. The proposal is now under review, and any change would likely take effect at a future index rebalancing. Until then, the fate of these Bitcoin treasury stocks hangs in the balance.
