TLDR:
- Strive challenges MSCI’s plan to exclude Bitcoin-heavy firms from indices.
- Strive warns MSCI’s Bitcoin exclusion rule could harm business innovation.
- Strive says MSCI’s Bitcoin exclusion proposal undermines market neutrality.
- Strive calls MSCI’s Bitcoin exclusion arbitrary and harmful to growth.
- Strive advocates for flexible index solutions on Bitcoin-heavy companies.
Strive Asset Management has raised concerns about MSCI’s plan to exclude companies with significant Bitcoin holdings from major equity indices. The Nasdaq-listed firm, which holds more than 7,500 BTC, argues that the proposal undermines MSCI’s commitment to index neutrality. Strive urges MSCI to reconsider its position, emphasizing that the decision could negatively affect the market and business innovation.
Strive claims that excluding companies with Bitcoin-heavy balance sheets would create unnecessary barriers. The firm argues that such a move would hinder growth and penalize companies that are incorporating Bitcoin into their business models. Strive suggests that MSCI should focus on maintaining neutral benchmarks and allow market forces to determine how to treat these firms.
Strive’s Position on Bitcoin-Treasury Businesses
Strive firmly believes that companies holding large amounts of Bitcoin, such as Bitcoin miners and structured finance firms, are operating businesses, not just investment funds. According to Strive, companies like MARA Holdings, Riot Platforms, and Hut 8 are diversifying into AI infrastructure and power services, using their Bitcoin reserves for growth. These companies represent some of the fastest-growing sectors, and Strive argues that excluding them would deny investors exposure to promising businesses.
Strive also points out that Bitcoin-backed financial products, such as structured notes, have become a legitimate business model. The firm itself has issued Bitcoin-backed products and views them as core to its operations. Strive asserts that these companies should be recognized as operating businesses and not be unfairly excluded from indices based on their Bitcoin holdings.
MSCI’s Proposed Exclusion Threshold Faces Criticism
MSCI’s proposal to exclude companies with more than 50% of their assets in Bitcoin faces significant backlash. Strive argues that the 50% threshold is arbitrary and could lead to inconsistent outcomes. For example, U.S.-based companies must mark Bitcoin to fair value, while international firms can hold Bitcoin at cost under different accounting standards, creating a disparity in treatment.
Strive’s criticism extends to the practicality of enforcing the proposed rule. The volatility of Bitcoin could lead to frequent changes in whether a company meets the threshold, causing unnecessary fluctuations in indices. Strive warns that this would result in increased management costs and tracking errors, undermining the stability of MSCI’s products.
Strive advocates for MSCI to offer customizable solutions rather than adopting rigid exclusion rules. The firm suggests that MSCI create “ex-Digital Asset Treasury” variants of its indices, allowing clients to choose whether to exclude companies with significant Bitcoin holdings. This approach would preserve MSCI’s neutrality while giving clients the flexibility to manage their exposure according to their preferences.
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