MSCI recently announced that Strategy and others may be removed from the indices. The institution that evaluates this will announce its decision on January 15, and JPMorgan wrote in its reports on the subject that it is not very hopeful. This was partly the reason for the November decline. But Saylor is determined not to give up.
Strategy’s Letter
The letter signed by Michael Saylor and Phong Le (CEO) explains why cryptocurrency reserve companies should not be removed from the MSCI index. The 12-page letter seems to be the last thing the company can do before the decision to be announced on January 15. MSCI’s proposal to remove digital asset treasury companies (DATs) from the Global Investable Market Indices is related to their performance as funds.
Straetgy, on the other hand, says that digital asset treasury companies (DATs) are operating companies, that the threshold for holding 50% cryptocurrency in reserves is arbitrary, and that the proposal inappropriately incorporates policy factors into index construction. Of course, risks of hindering innovation are also mentioned.
“We urge MSCI to reject this proposal. The proposal is based on a general mischaracterization of DATs and would impose arbitrary and unenforceable conditions that would stifle innovation, discredit MSCI indices, and conflict with national priorities. History shows that when key technologies emerge, institutions that allow markets to test them rather than restricting them in advance are successful. The digital asset ecosystem is currently at a similar crossroads: MSCI may bow to the reactive, short-term view that established institutions sometimes display towards innovation, or it may choose to adapt its indexes to the new developments of financial technology.” The smarter course for MSCI, investors, and the broader economy is for MSCI to remain neutral and let the markets determine the course of the DATs. If the Committee has any questions or would like more information, we are available to discuss.” – Source
Cryptocurrency Crash
As you can understand from Strategy’s pleading tone, the MSCI delist decision may cause a serious decline in cryptocurrencies on January 15. Many funds track MSCI indices and automatically invest in them. Cryptocurrency reserve companies such as MSTR also attract capital through these automatic entries, called passive investments. Passive investment among MSTR holders is thought to be 8 billion, and a sale of several billion dollars by delist would negatively affect the company’s already struggling MNAV score.
That’s why, in the letter it sent today, Strategy says to stay “neutral” and not take any “step that will be understood to brand us as uninvestable”.
“MSCI presents itself to the market and regulators as a neutral provider of “comprehensive” indices that reflect “the evolution of the underlying equity markets” and do not make judgments about “whether any particular market, company, strategy or investment is good or bad.”
However, if implemented, the proposal would raise concerns about the neutrality of MSCI indices by creating a new eligibility criterion specific to digital assets that does not have a solid basis in MSCI’s historical indexing practices.
Bitcoin 
$86,989.86 Digital assets such as these represent a technological innovation that could be the potential future basis of global financial systems and the engine of economic growth. That’s why the United States is currently vying for global leadership in digital asset technologies. “This is exactly the wrong time to take steps that would undermine this innovative technology.”
