MSCI Inc., the global provider of equity and ETF benchmarks, has decided not to remove digital-asset treasury companies (DATCOs) — including Strategy (formerly MicroStrategy) — from its flagship indexes. However, a lesser-noticed technical clause in the decision means that new Strategy shares will not be counted in index weightings, a change that could dampen passive demand linked to share issuance.
Index Inclusion Preserved — but With a Twist
MSCI announced that for the February 2026 index review it will maintain Strategy’s inclusion along with other DATCOs whose digital asset holdings make up at least 50% of total assets. This was welcomed by investors, with Strategy’s share price rising sharply after the announcement.
However, MSCI also imposed a technical freeze on certain index calculations: it will not implement increases to the Number of Shares (NOS) or related inclusion factors such as the Foreign Inclusion Factor (FIF) or Domestic Inclusion Factor (DIF). That means even if Strategy issues more shares, those newly issued shares will not be counted for index weighting purposes.
Why the “Hidden Clause” Matters
Under standard index rules, when a company that’s part of MSCI’s global indexes issues more shares — for example, to raise capital — passive index funds are typically required to buy a proportional portion of that new issuance to maintain correct weighting. This creates a reliable source of demand that can support share prices.
The new clause effectively breaks that mechanism for Strategy and similar companies. Even if Strategy raises capital by issuing new stock, passive investors tracking MSCI indexes won’t be obliged to buy the additional shares, potentially reducing automatic demand and increasing reliance on active buyers such as hedge funds, corporate investors, or retail traders.
Market analysts have described this as dismantling the “mechanical bid” that historically helped absorb dilution when Strategy raised capital to purchase more Bitcoin — a key driver of its business model.
Context: MSCI’s Broader Review of Index Criteria
MSCI’s move reflects broader market debate over how to treat companies whose primary assets are digital currencies. Some institutional investors raised concerns that DATCOs resemble investment funds more than traditional operating companies, leading MSCI to seek further input on eligibility criteria before making permanent changes.
The current policy pause and the embedded clause signal that MSCI is balancing investor concerns about forced sellingwith methodological caution about how digital asset holders fit into conventional benchmarks.
Market Reaction and Outlook
Shares of Strategy experienced a rally in after-hours trading after the announcement, reflecting relief over index inclusion. However, with the automatic buying mechanism muted, some analysts say the company faces new capital-raising challenges if it continues issuing equity to fund its Bitcoin accumulation strategy.
Investors and industry observers will be watching closely as MSCI conducts its broader consultation on index eligibility, which could lead to more lasting changes in how cryptocurrency-heavy companies are treated in global benchmarks.
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