BTC has just climbed back above $81,000, but is still down 2.86% over the past 24 hours. Yet the market is discussing more than whether $80,000 will hold—it is also debating whether publicly listed companies that hold BTC will remain eligible for index inclusion.
According to public discussions, MSCI is evaluating a screening proposal for “non-operating companies,” with results expected to be announced no later than October 16. Companies such as Strategy have not been formally announced as being excluded. Even if the new rules are adopted, existing index constituents may be given a grace period, with the screening criteria having to be failed for two consecutive review periods before any changes take effect.
My view is that it is worth distinguishing between a “simulated exclusion” and an adjustment actually being triggered. The former is enough to unsettle expectations, but it does not directly tell us how much passive selling there would be. A more distant concern is that, if share prices and valuation premiums come under pressure, companies may become less able to raise funds to accumulate more BTC. That chain of effects still depends on the final rules and the market’s reaction.
If these companies are ultimately left off the list, is the market worrying about a risk—or already trading on an outcome that hasn’t happened yet?
According to public discussions, MSCI is evaluating a screening proposal for “non-operating companies,” with results expected to be announced no later than October 16. Companies such as Strategy have not been formally announced as being excluded. Even if the new rules are adopted, existing index constituents may be given a grace period, with the screening criteria having to be failed for two consecutive review periods before any changes take effect.
My view is that it is worth distinguishing between a “simulated exclusion” and an adjustment actually being triggered. The former is enough to unsettle expectations, but it does not directly tell us how much passive selling there would be. A more distant concern is that, if share prices and valuation premiums come under pressure, companies may become less able to raise funds to accumulate more BTC. That chain of effects still depends on the final rules and the market’s reaction.
If these companies are ultimately left off the list, is the market worrying about a risk—or already trading on an outcome that hasn’t happened yet?