Why a 50% Rule Has the Industry Up in Arms
Strategy Inc.—the company sitting on more Bitcoin than any other public firm—just fired off a blistering 19-page letter to MSCI, the giant that runs some of the world’s most-watched stock indexes. The bone of contention? MSCI floated an idea to boot out any company whose digital assets make up more than half its balance sheet. Executive Chairman Michael Saylor and CEO Phong Le didn’t mince words, calling the proposal “misguided” and warning it would mess with how trillions of dollars get invested through passive funds.
Strategy’s argument is simple: we’re not some Bitcoin ETF in disguise. The company issues bonds, runs hedging strategies, and actively manages its capital structure—all the things operating companies do. Just because a big chunk of the balance sheet happens to be Bitcoin doesn’t change that fundamental reality. Saylor took to social media to rally support, urging the market to “defend neutral, rules-based index standards” before gatekeepers start making arbitrary calls.
The timing couldn’t be more critical. MSCI isn’t alone—FTSE Russell is looking at something similar, and S&P Dow Jones has hinted it’s thinking along the same lines. If Strategy gets kicked out, it sets a precedent that could hit every company with significant crypto on the books: miners, fintech firms, even tech giants holding stablecoins. What happens in the next few weeks could reshape how corporate treasuries approach digital assets for years to come.
The Accounting Nightmare Nobody Wants to Talk About
Here’s where things get messy. Try pinning down “50% of total assets” when Bitcoin’s price never stops moving and accounting rules differ across borders. Under U.S. rules, Bitcoin sits on the books at whatever you paid for it, minus any write-downs if the price crashes. Under international standards, companies revalue it every quarter at market price. So an American company might look fine on paper, then suddenly breach the 50% threshold overnight because Bitcoin rallied—or because it merged with a European firm that uses different accounting.
Strategy warns this would create chaos. Index providers would be constantly adding and removing companies based on crypto price swings, not actual business changes. Investors would lose confidence, and the whole point of stable, predictable benchmarks goes out the window. It’s the kind of mechanical whipsaw that benefits nobody except maybe high-frequency traders.
The letter also points out the double standard. Oil companies are basically giant piles of hydrocarbon reserves. REITs are mostly real estate. Timber firms own forests that dwarf everything else on their balance sheet. Nobody’s kicking them out of indexes for being “too concentrated” in their core asset. Why should digital assets be treated differently? Strategy argues that singling out Bitcoin injects policy bias into what’s supposed to be a neutral, market-based system.
What’s Really at Stake: Capital Flows and America’s Crypto Future
This fight isn’t just about index methodology—it’s about where billions of investment dollars flow. More than a third of equity money now comes through passive funds tied to MSCI’s global indexes. Get kicked out, and you’re effectively cut off from a massive pool of institutional capital. For Strategy and others like it, that could mean higher borrowing costs, lower stock prices, and a harder time raising money. It would also send a clear message to other companies: hold too much Bitcoin and Wall Street’s gatekeepers will shut you out.
Strategy frames this as a threat to U.S. competitiveness. The government has been slowly warming to digital assets—pilot programs for tokenized Treasury bills, guidance letting retirement plans hold some Bitcoin. If MSCI’s rule goes through, all that momentum could stall. Why would publicly traded companies innovate with digital assets if it means getting booted from the indexes that matter? The capital would flow overseas instead, to markets with fewer restrictions and more open-minded regulators.
What Comes Next
MSCI’s comment period closes in mid-January, with a final decision possibly coming by March. Strategy isn’t going quietly—they’ve vowed to rally institutional investors, talk to regulators, and coordinate with other companies in the same boat. All eyes are on whether the big names rumored to be holding Bitcoin—Tesla, Block, a handful of Latin American banks—will join the fight publicly.
If MSCI backs down, it could mark a turning point: Bitcoin becomes a legitimate corporate treasury asset, no different from cash or bonds. If they push forward, expect messy rebalancing in December, forced selling, and a chilling effect on corporate crypto adoption. Either way, this decision will echo far beyond Strategy Inc. As the company put it in their closing line: “The wiser course is to let markets, not gatekeepers, determine the future.” Now we wait to see if MSCI agrees.
