MSCI Tightens Index Standards, Threatening Crypto Treasury Companies

New Methodology Excludes Non-Operating Firms

Index provider MSCI has finalized stricter standards that could remove several cryptocurrency-focused companies from its global indexes, signaling renewed scrutiny of how the financial industry evaluates digital asset firms. According to MSCI, the organization adopted a new methodology this week that designates “non-operating companies” as ineligible for inclusion in its MSCI Global Investable Market Indexes—a decision that could force massive fund rebalancing.

The criteria, initially proposed in August, represents a significant shift in index construction philosophy. MSCI will assess corporate eligibility by examining operating assets alongside five specific financial ratios. Companies that fail at least four of these five tests face potential removal. For firms already included in the indexes, the process requires underperforming on these metrics across two consecutive annual reporting periods before actual deletion occurs.

Strategic Holdings Face Immediate Risk

Three companies are poised for imminent removal: Strategy (ticker MSTR), Metaplanet, and Upexi. Additionally, several others have been placed under enhanced monitoring, including Sharplink, Inc (SBET), Ton Strategy Company (TONX), Solana Company (HSDT), and DeFi Development Corp. (DFDV), all of which could face removal if they fail MSCI’s screening process.

The consequences of removal extend far beyond symbolic significance. Index-tracking funds manage trillions in assets globally and must mechanically sell any holdings that drop from their benchmark indexes. This forced selling dynamic could exert substantial downward pressure on share prices while simultaneously eroding the passive investor base supporting these companies.

Conner Brown, executive director of the Bitcoin Policy Institute, underscored this concern earlier this year, noting that index exclusion removes holdings “from the default portfolios of tens of millions of people who never chose to remove it.” He highlighted Strategy as a concrete example of how such policy changes could disrupt companies whose business models had previously aligned with major index criteria.

Timeline and Industry Response

MSCI will announce the final list of companies targeted for removal on November 11, 2026, with changes taking effect on November 30. The compressed timeline gives affected firms limited opportunity to contest the determination or make strategic adjustments.

When MSCI first introduced the proposal, Strategy responded by opposing the methodology while simultaneously downplaying potential damage. The company noted that index funds currently hold approximately 13 million of its shares, representing just 3.1 percent of its total outstanding shares—roughly equivalent to a single day’s trading volume under normal market conditions.

JPMorgan analysts previously estimated that Strategy’s removal alone could trigger approximately $2.8 billion in selling pressure, though that projection was based on an earlier version of the methodology and may require recalibration under the newly finalized rules.

The shift reflects broader tension within the financial industry about how to classify and evaluate companies positioned at the intersection of cryptocurrency and traditional finance. As crypto treasury strategies gain mainstream institutional acceptance, how major index providers define and measure legitimacy will increasingly shape investment flows across the digital asset sector. These regulatory changes could affect passive investing demand across the broader crypto asset class, potentially impacting how digital assets gain mainstream institutional traction.

Source: MSCI, via Cointelegraph. Not financial advice.