Strategy: The proposed 50% Bitcoin threshold by MSCI triggers "severe volatility" and conflicts with U.S. innovation policy

Strategy wrote to the MSCI Equity Index Committee, urging it to abandon a proposal. The proposal aims to prohibit companies with digital asset holdings exceeding 50% of total assets from being included in its global equity benchmarks. Strategy warned that this move would lead to significant volatility in the index and contradict the U.S. government's policy of promoting innovation in digital assets.

Strategy believes that if Bitcoin prices fluctuate or accounting standards differ, companies holding Bitcoin assets will "dramatically enter and exit" major indices, causing confusion for index providers and investors. MSCI argues that digital asset treasury (DAT) companies like Strategy and BitMine are more akin to investment funds than traditional operating businesses.

Strategy pointed out that due to IFRS reporting, companies can value Bitcoin at cost, while U.S. GAAP requires quarterly fair value marking, making the rule difficult to apply consistently. Strategy is the largest public holder of Bitcoin, with 660,624 BTC valued at nearly $6.1 billion. JPMorgan analysts estimate that if Strategy is removed, it could face about $2.8 billion in passive fund outflows. MSCI is expected to make a final decision by January 15.