MSCI Keeps Digital Asset Treasury Firms, Begins Wider Review

• MSCI defines DATCOs as companies whose digital asset holdings account for 50% or more of total assets, maintaining their current index treatment
• Strategy will remain in MSCI global benchmarks for now, with the company calling it 'a strong outcome for neutral indexing and economic reality'
• The decision follows investor feedback expressing concern about DATCOs, prompting MSCI to conduct further research on distinguishing between investment companies and firms holding digital assets as core operations

Summary

Key Development:

MSCI announced Tuesday it will not move forward with its proposal to exclude digital asset treasury companies (DATCOs) from its indexes. Instead, the index provider will launch a broader consultation on how to treat non-operating companies across its benchmarks.

Main Details:

MSCI will maintain current treatment of companies on its preliminary DATCO list—defined as firms whose digital asset holdings account for 50% or more of total assets. This decision means Strategy (formerly MicroStrategy) will remain in MSCI's global benchmarks through at least the February 2026 review.

Company Response:

Strategy welcomed the decision on social media platform X, calling it "a strong outcome for neutral indexing and economic reality."

Rationale:

MSCI cited investor feedback expressing concerns about distinguishing between investment companies and operational companies that hold digital assets as part of their core business rather than for investment purposes. The firm stated that assessing index eligibility for such entities "requires further research and consultation with market participants" and may necessitate additional inclusion criteria, including financial-statement-based indicators.

Market Implications:

The decision provides temporary relief for cryptocurrency-focused treasury companies that have accumulated significant digital asset holdings. However, uncertainty remains as MSCI plans to conduct a comprehensive review of non-operating company classification standards. This could affect index inclusion criteria for various firms beyond just digital asset holders, potentially impacting passive investment flows and benchmark composition in future reviews.