Strive Asset Management urges MSCI to reconsider its latest policy, effectively disadvantaging public companies with significant Bitcoin exposure, potentially impacting key market indices.
This move could disrupt market dynamics by forcing sales, affecting Bitcoin-centric firms like MicroStrategy, stirring debate on institutional attitudes towards crypto-exposed corporations.
Strive Asset Management Critiques MSCI's Bitcoin Policy
Strive Asset Management has pushed back against MSCI Inc.'s new policy aimed at excluding firms with substantial Bitcoin exposure. The policy primarily impacts companies like MicroStrategy, which hold significant cryptocurrency assets, triggering investor concerns.
The policy reclassifies certain companies, excluding those with over 50% of their assets in Bitcoin, effectively creating a de-facto blacklist. MSCI and Strive's debate concerns the impact on key indices and investor returns.
Potential $2.5B–$5.5B Sales from MSCI Policy
Market implications include potential forced sales in equity, particularly affecting MicroStrategy. Major investment banks like TD Cowen criticize the policy, while MSCI faces backlash over perceived anti-Bitcoin bias from various stakeholders.
Historically, index-related changes have exerted limited immediate price influence, yet potentially trigger $2.5B–$5.5B sales. Experts indicate financial effects might be smaller than predicted, reflecting past Nasdaq‑100 inclusions.
Matt Hougan, Chief Investment Officer, Bitwise Asset Management, "I’m not convinced that removal would be a big deal for the stock. $2.8 billion is a lot of selling, but my experience from watching index additions and deletions over the years is that the effect is typically smaller than you think and priced in well ahead of time."
MSCI's Exclusion Impact Compared to Nasdaq-100
Past index inclusions/exclusions such as the Nasdaq‑100 addition showed muted price effects, casting doubt on MSCI’s potential exclusion impact. Similar classification debates have occurred around other sectors.
Experts warn that excluding companies like MicroStrategy could affect market perceptions but predict the larger industry transition effects might mirror previous index changes. This highlights MSCI's market power without drastically altering company operations.
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