Strive calls on MSCI to rethink its ‘unworkable’ Bitcoin blacklist

In a move that spotlights the delicate balance between active risk management and the realities of modern, crypto-enabled finance, Strive has urged MSCI to rethink its proposed exclusion of major Bitcoin-holding companies from its widely followed indexes. The exchange-listed Strive, described as the 14th-largest publicly listed Bitcoin treasury firm, argues that an overly broad blacklist would blunt the market’s ability to participate in growth tied to digital assets while failing to capture the companies it intends to penalize. The exchange of views highlights broader tensions in index design as the crypto sector matures and as AI demand reshapes the economics of data centers and power consumption.

As a reminder, MSCI’s preliminary exclusion list targets companies whose digital asset holdings would exceed a significant portion of total assets. Strive contends that deciding the fate of dozens or even hundreds of firms based on a single metric—a volatile, evolving asset like Bitcoin—could produce unintended consequences for passive investors and misrepresent the investable universe. The argument is not only about Bitcoin itself but about how best to reflect corporate strategies that blend treasury holdings with traditional operations, including mining, infrastructure, and AI computing services.

Strive calls on MSCI to rethink its ‘unworkable’ Bitcoin blacklist: A closer look at the proposal and implications

The central premise behind the MSCI proposal is straightforward in theory: if a company’s Bitcoin holdings are large enough, it might be excluded from certain MSCI indexes to protect passive investors from concentrated risk or misaligned incentives. In practice, however, the mechanics are messy, and the outcomes could be counterproductive for both investors and the companies involved. Strive’s leadership argues that the market should decide where exposure makes sense, rather than a blunt, binary rule that can create tracking errors and mispricing in index funds and ETFs.

“Let the market decide” is not a slogan for a casual debate. It’s a call to preserve the integrity of passive investments while ensuring continued access to the growth stories inside the crypto ecosystem. If we overcorrect with a sweeping exclusion, we risk reducing exposure to sectors and firms that are genuinely positioned to contribute to innovation in AI, data infrastructure, and fintech,” said Strive CEO Matt Cole.

To unpack Strive’s case, it helps to understand the practical consequences of a 50% threshold on a company’s digital asset holdings. Strive contends that the 50% rule—where digital assets would need to exceed half of a company’s total assets to qualify for exclusion—does not align with how modern treasuries operate. Many firms diversify across multiple asset classes, and a sizable BTC stake can coexist with diverse business lines, including software services, cloud infrastructure, and AI compute offerings. For passive investors using MSCI indices as a guide to market exposure, such a rule could create artificial churn in index membership, forcing frequent rebalancing and increasing tracking error for funds that aim to mirror the benchmark with low turnover costs.

In its letter to MSCI’s chairman and CEO, Henry Fernandez, Strive emphasizes that the exclusion would “not fairly reflect” the companies it intends to cover. The concern is not only about whether to include or exclude but about the criteria used to determine inclusion. If the metric is too blunt or too volatile, it undermines the very purpose of a benchmark: transparency, stability, and a representative sample of the investable universe. The Strive argument is that an index should reflect the real choices investors make, including treasury strategies that may evolve over time as asset mixes, accounting rules, and financial instruments change.

Beyond Treasury holdings, the debate touches on how to treat crypto-native products and strategies that some firms use to offer exposure to Bitcoin returns via traditional financial instruments. In particular, Strive highlights a category of “Bitcoin structured finance” products that resemble the notes and notes-like structures offered by major banks. These products can provide exposure to Bitcoin’s price movements without requiring direct ownership of digital assets by the issuer, potentially creating a parallel pathway to crypto risk that should be accounted for in benchmarks. If MSCI excludes certain firms on the basis of their direct BTC holdings, it could also unintentionally penalize providers of structured notes and derivatives linked to Bitcoin, even if those businesses are fundamentally different in risk profile and capital structure from pure miners or treasuries.

Strive’s case rests on several practical considerations for investors and asset owners:

• Market representation: A blanket exclusion risks removing from benchmarks legitimate players that drive economic value in a crypto-enabled economy, including miners, treasury operators, and fintechs that monetize digital assets through diverse business lines.
• Tracking error: Index funds track broad benchmarks with the goal of mirroring index performance. If inclusion criteria are volatile or too rigid, funds may have to “trade around” the index to avoid exclusions, increasing costs and reducing predictability for long-term investors.
• Asset mix dynamics: Companies often change their exposure via derivatives, swaps, or other financial instruments that alter economic risk without necessarily reflecting a direct, static holding in BTC. This creates measurement challenges for any binary threshold.
• Industry evolution: The crypto ecosystem is not static. As AI compute demand, mining efficiency, and energy dynamics evolve, the role of Bitcoin in corporate strategy may shift in ways that a fixed exclusion criterion cannot anticipate.

Matt Cole, Strive’s chief executive, has been explicit about the real-world risks of a rigid 50% threshold. He points to visible industry examples as a cautionary tale: some companies acquire or increase BTC exposure via derivatives and exchange-traded products rather than direct ownership, which means a 50% trigger could overlook material risk exposures that the market should consider when evaluating a company’s overall business model.

In their correspondence with MSCI, Strive pressed for a more nuanced approach that would protect passive investors while acknowledging the legitimate strategic interests of companies that hold digital assets as part of their growth plans. A key suggestion put forth by Strive is the creation of an “ex-digital asset treasury” version of existing MSCI indexes. Such an approach would allow asset owners who prefer to avoid crypto-exposed firms to choose alternative benchmarks, while others could continue to use standard indices that capture the broader investable universe. This would preserve market efficiency, limit unintended consequences, and maintain competitive access to crypto-driven growth along with the rest of the tech-enabled economy.

Broader context: Bitcoin treasuries, AI infrastructure, and the evolving landscape of crypto finance

The Strive discussion sits at the intersection of several powerful secular trends shaping global markets today. First, Bitcoin treasuries—corporate holdings of BTC as a balance-sheet reserve or treasury asset—have grown in visibility and size as more publicly traded firms allocate capital to digital assets. While Bitcoin itself remains volatile, the rationale behind treasury diversification is often about financial flexibility, inflation hedging, and alignment with corporate narratives tied to digital intelligence, decentralized systems, and new tech-enabled growth engines.

Second, the AI revolution is redefining the demand for computing power and associated infrastructure. Strive and other large holders of Bitcoin mining assets emphasize that major miners—such as MARA Holdings, Riot Platforms, and Hut 8—are expanding into AI infrastructure. This expansion includes not only power generation and data centers but also the broader ecosystem that supports AI training and inference. The strategic position for these companies is often a mix of energy-intensive operations and the ability to repurpose assets for AI compute workloads, creating a critical alignment with the global push toward AI-driven productivity gains.

“Many analysts argue that the AI race is increasingly limited by access to power, not semiconductors. Bitcoin miners are ideally positioned to meet this rising demand,” Matt Cole noted in interviews and dispatches to investors. “But even as AI revenue comes in, their Bitcoin will remain, and your exclusion would too, curtailing client participation in the fastest-growing part of the global economy.”

The potential for synergies between crypto-focused business models and AI infrastructure has drawn attention from a broad set of market participants, including major banks and diversified asset managers. For example, some traditional financial institutions have introduced or expanded crypto derivatives, structured notes, and other digital-asset-linked products designed to appeal to investors seeking exposure to Bitcoin alongside more conventional asset classes. JPMorgan, Morgan Stanley, and Goldman Sachs have been active in offering crypto-linked products and services, notably in the realm of Bitcoin derivatives and structured finance. In this environment, a rigid blacklist could disproportionately affect a subset of firms that are actively integrating digital assets into broader business strategies rather than purely pursuing crypto-only revenue streams.

Bitcoin structured finance—an approach that packages BTC-linked exposures into notes, securitized products, or synthetic constructs—has become a growing area for both institutional and retail investors. Platforms and issuers have developed products that track Bitcoin returns, providing access to crypto exposure while leveraging the traditional financing and risk-management framework of Wall Street. Strive contends that excluding firms with BTC exposure from index benchmarks would ignore the reality that Bitcoin is increasingly embedded in a wider financial services ecosystem. The same ecosystem that delivers liquidity, equity research, and risk management services also underpins the broader availability of crypto-linked investment products from banks and non-bank issuers alike. In Strive’s view, a properly designed benchmark would reflect this integration, rather than penalize it arbitrarily.

From a practical perspective, the debate is also about how to measure digital asset exposure in a way that remains robust across market cycles. The crypto market is highly volatile, with Bitcoin at times moving in sharp shifts that reflect macro signals, regulatory developments, and shifts in risk sentiment. A threshold that depends on a single price spike or a temporary asset allocation can produce misleading signals about a company’s underlying business risk. As a result, some investors could face sudden rebalancing, raising governance costs and complicating risk management for funds that rely on stable index membership for long-term investment horizons.

A broader concern is that the exclusion could disproportionately affect smaller or mid-sized entities that are more likely to adjust their treasury and financing strategies in response to market conditions. Large, well-known miners and treasury holders have more capacity to hedge exposures, diversify revenue sources, and maintain balanced asset mixes. In contrast, smaller players might be more vulnerable to exclusionary rules, potentially pushing them into riskier capital setups or reducing their ability to raise capital through public markets. This dynamic could reduce competition and innovation in the crypto-adjacent sectors that are still seeking to prove their business models to mainstream investors.

Implications for Strategy, Metaplanet, and similar players in the crypto-finance ecosystem

The MSCI consultation, and Strive’s response, is particularly salient for Strategy (the company led by Michael Saylor) and Metaplanet, both of which have built businesses around Bitcoin-linked strategies and client offerings. Strategy, which trades within the MSCI World Index framework, has drawn attention from analysts who warned of potential material impact if the index provider advances with the proposed exclusion. JPMorgan analysts estimated that Strategy could lose as much as $2.8 billion in market value if MSCI moves forward with the exclusion, underscoring the financial scale that can hinge on benchmark decisions. Such projections help illustrate why the debate has moved beyond purely academic arguments and into the realm of material guidance for asset allocators and fund managers.

Michael Saylor, Strategy’s chairman, has indicated that the company is actively engaging with MSCI on the issue. In Saylor’s view, the question is not whether Bitcoin should play a role in treasury strategies, but how index design should reflect the evolving nature of digital assets and corporate balance sheets. If MSCI adopts a binary exclusion rule, companies might respond by shifting exposures, reconfiguring treasury practices, or seeking alternative index-tracking vehicles that better align with their risk profiles and strategic objectives. The result could be a reshaping of how institutional investors access crypto-related exposures through passive funds and custom strategies.

Metaplanet, another firm with Bitcoin-linked offerings, also argues for a more nuanced approach to benchmarking. The company has emphasized that Bitcoin structured finance and related products are legitimate, integrated components of the modern financial ecosystem. Strive’s proposed counter-solution—a dedicated ex-digital asset treasury index that allows certain investors to opt out—aims to preserve the integrity of both the standard indices and the risk-managed, transparent exposure that many institutional investors require. This approach would enable a more granular, investor-centric choice set while preserving the broader objective of representing the investable equity universe.

From an investment product perspective, the debate also intersects with the broader world of ETFs, mutual funds, and retirement accounts that rely on MSCI and similar providers for exposure to global equities. The potential ripple effects extend to asset-allocators who use index-based strategies for diversification, risk control, and performance attribution. If an exclusion rule affects index membership unpredictably, it could complicate long-term planning and performance forecasting for funds that follow MSCI benchmarks. While MSCI has historically emphasized methodological transparency and governance, the Strive letter highlights a practical tension: the need to balance risk controls with the realities of a crypto-enabled economy where digital assets are intertwined with traditional financial markets.

Alternative approaches: A path forward that preserves market efficiency and investor choice

In their advocacy, Strive lays out a concrete alternative to the exclusion-only approach. An “ex-digital asset treasury” version of MSCI indexes would create a parallel benchmark series that excludes companies with substantive BTC holdings while maintaining standard indices for broader market representation. This dual-track concept would allow asset owners with explicit mandates—privacy concerns, ESG considerations, or risk tolerance levels—to choose the benchmark that aligns with their objectives. At the same time, it would keep the standard benchmark intact for investors who want to maintain exposure to the full investable universe, including crypto-enabled growth stories.

Implementing such an approach would entail several practical steps:

1. Clear, auditable criteria for what constitutes a “digital asset treasury” exposure, including direct BTC holdings and economically equivalent exposures via derivatives or structured notes.
2. Transparent measurement methodologies for determining when a company crosses the threshold for inclusion or exclusion, with robust consistency across time and across markets.
3. Documentation of the governance framework, including governance committees, review cycles, and stakeholder feedback channels to ensure ongoing alignment with market practices and investor expectations.
4. Communication plans for market participants to understand how the ex-digital asset treasury index differs from the standard index, how tracking error is managed, and how portfolio managers should approach rebalancing decisions.

Strive’s proposal also invites broader dialogue about the taxonomy of crypto-enabled businesses. It encourages investors and policymakers to consider the diversity of business models within the crypto ecosystem—from miners and treasury holders to fintechs and banks that offer crypto-linked products. A more nuanced taxonomy could help benchmark providers like MSCI capture the material risks and opportunities within this evolving space, while reducing the risk of mispricing or misinterpretation by passive investors.

In parallel, market participants could advocate for enhanced disclosure standards related to digital asset holdings and related financial instruments. Greater transparency would improve the reliability of benchmarks and help ensure that investors accurately understand a company’s exposure to digital assets and the range of risks associated with those assets. Such disclosures could include the size and nature of BTC holdings, the use of derivatives to gain exposure, the impact of asset-liability profiles on capitalization, and the extent to which mining or data-center operations color strategic decisions.

Pros and cons of the MSCI exclusion approach versus Strive’s alternative

To evaluate the two approaches, it helps to compare their implications for different stakeholder groups—investors, index providers, and the crypto ecosystem at large.

Pros of the exclusion approach

• Clear risk differentiator: A binary rule provides a straightforward signal for investors seeking to avoid crypto-related exposure.
• Consistency with risk-management goals: By removing higher-risk exposure, the approach aligns with conservative risk controls for some pension funds, sovereign wealth funds, and other fiduciaries.
• Regulatory clarity: A defined, rule-based criterion reduces ambiguity for fund managers navigating compliance regimes.

Cons of the exclusion approach

• Potential mispricing: A single threshold on BTC holdings may misrepresent a company’s overall risk and growth prospects, especially when digital assets are only one component of a diversified business model.
• Tracking error and turnover: Exclusions can cause frequent rebalancing, inflating costs for passive funds designed for low turnover.
• Economic impact on crypto-linked products: Banks and asset managers who issue crypto-linked notes or ETFs may be inadvertently constrained, potentially limiting investor access to crypto-focused investment strategies.

Pros of Strive’s ex-digital asset treasury index concept

• Investor choice and transparency: Investors who wish to avoid crypto exposure can select alternative benchmarks, while others can access the full universe.
• Stability and predictability: A well-defined ex-digital asset series reduces the risk of abrupt index membership changes tied to volatile BTC prices.
• Market integrity: The approach preserves the representativeness of benchmark indices while acknowledging the diverse business models in crypto-enabled industries.

Cons or challenges of the ex-digital asset treasury concept

• Complex implementation: Designing and maintaining a dual-track index family requires governance, data quality, and transparency that may take time to standardize.
• Market adoption: Asset managers and ETF issuers would need to align with new benchmarks, which could create transitional frictions in product development.

Temporal context, statistics, and policy considerations

As of the latest market cycles, Bitcoin treasury strategies have increasingly been part of the narrative around corporate resilience, inflation hedging, and strategic diversification. The debate around MSCI’s proposed Bitcoin blacklist has immediate relevance for investors who rely on index-based exposure to drive portfolio outcomes, particularly in a year when AI demand and digital infrastructure investments are shaping capital markets. Publicly available estimates—such as JPMorgan’s projection that Strategy could face billions in market value adjustments if exclusions are imposed—underscore the scale of potential market impact when benchmark rules shift.

From a policy perspective, the conversation also touches on governance and accountability in index construction. As financial markets evolve, index providers face pressure to balance simplifying assumptions with the complexity of modern corporate capital structures that increasingly incorporate digital assets. Regulators and industry groups have shown continued interest in how crypto assets are treated in benchmarks, especially as more funds use passive strategies to gain exposure to growth segments that intersect with fintech, cloud computing, and AI.

On the ground, companies continue to adjust their capital allocation strategies in response to market signals. Some maintain substantial BTC holdings as a core part of their treasury policy, while others use a mix of holdings and derivatives to optimize risk-reward characteristics. The result is a world in which the lines between crypto-native and traditional finance are blurred, making precise benchmark classification both important and difficult. Strive’s call for a more nuanced design reflects a pragmatic approach to this evolving landscape—one that preserves the benefits of passive investing while acknowledging the strategic realities of crypto-enabled business models.

Conclusion: A path toward smarter benchmarks that respect market realities

The debate over Strive’s appeal to MSCI to rethink its ‘unworkable’ Bitcoin blacklist centers on one core question: how should benchmarks capture the evolving role of digital assets in corporate finance and growth-oriented strategies? The 50% threshold, as currently proposed, raises legitimate concerns about timing, measurement, and the potential for unintended consequences that would ripple through passive funds, ETFs, and the broader investment ecosystem. Strive’s response—advocating for an ex-digital asset treasury index alongside a standard benchmark—offers a constructive path that preserves investor choice, safeguards market efficiency, and better aligns benchmark rules with how modern companies actually manage digital assets and compute-driven growth.

For investors, the practical takeaway is to stay attuned to how benchmark methodology evolves. If MSCI or other major index providers embrace more granular, transparent criteria—anchored in robust data, clear governance, and flexible architectures—passive strategies can continue to deliver diversified exposure to high-growth sectors without sacrificing trust in benchmark integrity. For the crypto ecosystem, the discussion reinforces a growing consensus: the future of finance is not simply about owning Bitcoin or mining power, but about integrating digital assets into a broader, dynamic system of financial instruments, AI-powered infrastructure, and sustainable value creation.

FAQ

1. What is the main issue Strive is raising?

   Strive argues that MSCI’s proposed exclusion of Bitcoin-holding companies from its indexes—based on a 50% digital-asset threshold—could be unworkable and misrepresent the investable universe. The firm advocates a more nuanced approach, such as an ex-digital asset treasury index, to preserve market efficiency and investor choice.

2. Why is the 50% threshold viewed as problematic?

   Because it relies on a volatile, evolving asset (Bitcoin) and can cause firms to “flicker” in and out of the index as their exposure changes. It also complicates measurement when companies gain exposure through derivatives and other instruments, potentially creating tracking errors and higher costs for passive funds.

3. Who is Strive in this debate?

   Strive is a Nasdaq-listed Bitcoin treasury firm that emphasizes the strategic value of digital assets in corporate finance and growth. The company argues for market-driven decision-making and more nuanced benchmark design that reflects the actual business models of crypto-associated firms.

4. What is the proposed alternative?

   An “ex-digital asset treasury” version of MSCI indexes, allowing investors who want to avoid crypto exposure to use a different benchmark while others continue to use standard indices that represent the full investable universe.

5. How could this affect Strategy and other crypto-linked firms?

   If exclusion thresholds are adopted, Strategy and similar companies could see changes in index membership and potential valuation impact. JPMorgan analysts have previously warned of substantial losses in market value for Strategy under a strict exclusion regime, highlighting the financial stakes involved.

6. What role do AI compute and mining play in this debate?

   Strive argues that major Bitcoin miners are expanding into AI infrastructure and that their business models increasingly blend energy, data centers, and crypto exposure. The AI demand for power and data capacity strengthens the case for a measured approach to benchmarking that recognizes these dual roles rather than penalizing them outright.

7. What about Bitcoin structured finance?

   Bitcoin structured finance involves notes and notes-linked products tied to Bitcoin returns. Strive notes that excluding digital-asset-exposed firms could also risk deterring innovative financing products that currently help investors gain exposure to Bitcoin through traditional channels.