Bitcoin Policy Institute Paper Says MSCI Rule Puts Strategy at Risk

MSCI Index Proposal Raises Questions About Market Power

A Bitcoin Policy Institute paper titled “Wall Street’s Invisible Committee” examines how index-provider decisions can move large sums of capital without the providers directly managing investor money. The analysis by Brown focuses on MSCI, whose benchmarks are tracked by funds that generally must adjust their holdings when the index provider changes its constituent list.

That structure gives MSCI significant influence over companies included in its indexes. Fund managers control the assets, but the firm that establishes the index rules can still set billions of dollars in trading motion when it adds, removes or changes the treatment of a company.

The potential impact became more concrete in 2025, when MSCI proposed excluding companies whose digital assets accounted for at least 50% of their total assets. The proposal directly put Strategy, the bitcoin treasury company, in focus. JPMorgan analysts estimated that Strategy’s removal could lead to approximately $2.8 billion in selling by funds tracking MSCI indexes. If other major index providers adopted a similar approach, the estimated selling could rise to $8.8 billion.

MSCI ultimately abandoned that proposal. However, Brown’s analysis highlights subsequent steps by the index provider, including a freeze on increases in the number of shares counted for affected companies and a delay in new additions while MSCI prepared a broader review.

MSCI’s Revised “Operating Assets” Test

Seven months later, MSCI returned with a wider proposal that did not specifically identify bitcoin or digital assets. Instead, the August proposal focuses on whether a company has sufficient “operating assets.”

Under the proposed framework, a company that fails the initial 50% screen would face five additional financial tests. A company that is not already an index constituent could be excluded after triggering four of those tests. Existing constituents would receive certain buffers and would generally need to fail during two consecutive annual reviews before removal.

Brown’s central criticism is that “operating assets” is not a standardized balance-sheet category under either U.S. GAAP or IFRS. As a result, MSCI would need to determine how to classify assets such as cash, mineral rights, unfinished construction, intellectual property and strategic holdings before applying the methodology.

The paper also examines how the proposal could apply to Strategy’s bitcoin accounting. Strategy reported $22.8 billion in bitcoin-related operating losses during the first half of 2026, compared with $195 million in other operating expenses. Brown argues that counting those figures as Strategy reported them would mean one of MSCI’s flags was not triggered. The 23-page paper therefore contends that reproducing MSCI’s simulated result requires an analytical reclassification that the consultation does not explain.

Uranium, Space and Lithium Companies Expand the Debate

The implications of MSCI’s methodology extend beyond bitcoin, according to Brown. MSCI’s simulated deletions also include Yellow Cake, a company that holds physical uranium. The Bitcoin Policy Institute paper applies the proposed framework to other capital-intensive businesses, including companies developing satellites and a major U.S. lithium mine.

Under one plausible interpretation examined in the paper, AST Spacemobile could trigger four of MSCI’s flags and potentially be excluded as a new index entrant. Lithium Americas provides another example. The company is developing the Thacker Pass lithium project in Nevada, and Brown’s analysis finds that it could also trigger four flags.

Lithium Americas reported $3.54 billion in assets in June, including $2.09 billion in mineral properties, plant and equipment. Brown’s paper argues that a restrictive interpretation of MSCI’s proposal could classify a mine under construction as “non-operating” because it is expensive to build, has not started generating revenue and relies heavily on external financing.

That creates an unusual potential outcome: the larger and more unfinished a capital-intensive project is, the more difficult it may become to characterize its assets under the proposed methodology. The issue is therefore not limited to how index providers treat bitcoin treasury companies, but also to how they define productive business activity across industries.

MSCI Decision and Index Review Timeline

MSCI is expected to make a decision on or before Oct. 16. Any changes adopted under the process are scheduled for the November index review, around Dec. 1.

Brown’s paper begins with bitcoin treasury companies, but its broader argument concerns the influence of index methodologies across financial markets. When trillions of dollars are mechanically linked to benchmark changes, the classification of an operating business can have direct consequences for company inclusion, fund trading and market liquidity.

Why This Matters

Index providers do not directly manage the trillions of dollars invested through benchmark-tracking funds, but their rules can determine which securities those funds must hold. The MSCI proposal illustrates how a methodology aimed at one category of company can potentially affect businesses with very different assets, financing needs and development timelines.

The upcoming MSCI decision will determine whether the proposed tests move forward and how any adopted changes are applied during the November review. Based on Brown’s analysis, the outcome could matter not only to Strategy and other digital-asset companies, but also to firms involved in uranium, space technology and mining.

Frequently Asked Questions

What did MSCI originally propose?

MSCI proposed excluding companies whose digital assets represented at least 50% of their total assets. The proposal placed Strategy, the bitcoin treasury company, in focus, but MSCI later abandoned it.

What is MSCI’s revised proposal about?

The revised August proposal focuses on whether companies have enough “operating assets.” Companies that fail an initial 50% screen could face five additional financial tests, with exclusion possible after four triggers for companies that are not already index constituents.

When is MSCI expected to decide?

MSCI is expected to decide on or before Oct. 16. Any approved changes are scheduled for consideration in the November index review around Dec. 1.