Global index provider MSCI has officially scrapped a controversial proposal to boot crypto-heavy firms from its benchmarks, averting billions in forced selling that threatened to capsize volatility-sensitive stocks like MicroStrategy (MSTR).
The decision, confirmed in a consultation outcome released late Tuesday, halts the reclassification of "Digital Asset Treasury Companies" (DATCOs) ahead of the February 2026 index review. Markets reacted instantly: MicroStrategy rallied 6% in after-hours trading, erasing losses from a session where it had closed at $158.50.
The "DATCO" Threat
The shelved proposal would have been catastrophic for corporate bitcoin holders. MSCI had considered reclassifying any public company holding more than 50% of its assets in digital tokens as a "non-operating" investment vehicle.
Such a designation would have stripped these firms from key indexes like the MSCI World, forcing passive ETFs and institutional funds to liquidate their positions regardless of price or sentiment. Analysts estimated the resulting capital flight from MicroStrategy alone could have exceeded $2.8 billion.
"MSCI acknowledged that feedback from investors highlighted concerns that some Bitcoin treasury firms resemble investment vehicles rather than operating companies… However, it concluded that distinguishing between investment companies and those holding digital assets as part of their core operations requires further research."
Kicking the Can
While the immediate threat is gone, the structural question remains. MSCI signaled it will now launch a broader consultation on the definition of "non-operating companies" across all sectors, not just crypto. This effectively delays any punitive action but keeps the door open for future eligibility tightening.
For now, the liquidity tap remains open. Bitcoin (BTC) held steady at $92,000 following the news, as traders priced in the removal of a major structural overhang for the asset class’s largest corporate proxies.
