Crypto.com and Corporate Bitcoin Holders Rally Against MSCI’s 50% Treasury Rule
Crypto.com formally objected to MSCI’s proposed index methodology that would remove companies from major MSCI stock indexes if digital assets constitute 50% or more of total assets and the firm is deemed to be running a “digital asset treasury.” Justin Wales, Head of Legal for the Americas at Crypto.com, argued the rule unfairly singles out crypto as a treasury asset, misclassifies operating firms as funds, and risks forced selling and market distortions. The proposal — introduced in October 2025 — identified 39 companies potentially affected, with combined market value above $113 billion. Strategy (MicroStrategy), the largest corporate Bitcoin holder with 671,268 BTC, faces direct exposure; its executives Michael Saylor and Phong Le called the 50% threshold “discriminatory, arbitrary, and unworkable.” Advocacy groups and analysts warn index exclusions could trigger $10–15 billion in forced selling across affected firms, with JPMorgan estimating about $2.8 billion in passive fund sales for Strategy alone. Crypto.com and industry backers argue MSCI should apply neutral, economically grounded criteria rather than blunt balance-sheet thresholds to avoid raising capital costs and chilling corporate crypto adoption.
Bearish
The MSCI proposal creates the risk of forced selling from index-tracking funds if large corporate crypto holders are excluded. Historical precedents show index rebalances and forced exclusions can cause sharp downside pressure on affected equities and, by extension, correlated crypto markets. Estimates cited in the article ($10–15bn total; ~$2.8bn for Strategy) suggest significant liquidity shock potential. In the short term, uncertainty and potential passive-fund outflows increase volatility and downside risk for stocks of crypto-heavy firms and could apply negative price pressure to Bitcoin due to concentrated corporate holdings and perceived systemic selling. Over the medium to long term, if MSCI adopts a neutral, economically grounded methodology after industry pushback, the market impact could moderate; conversely, a finalized exclusionary rule would likely deter corporate treasury adoption of crypto, reduce capital availability for crypto-native firms, and maintain a sustained negative sentiment. Traders should watch MSCI’s consultation outcomes, index rebalancing timelines, and large holders’ responses (legal, governance or asset reallocation), which will drive short-term flows and inform longer-term sector allocation.