DAT Hit Again: MSCI Removes Three Treasury Companies — How Long Can Debt-Financed Crypto Buying Hold Up?
- Key Takeaways: MSCI has officially removed three crypto treasury companies — Strategy, Metaplanet, and Upexi — from their respective indices under a new "non-operating company" framework that draws the boundary for operating businesses. The premium-financing accumulation model relied on by crypto treasury companies now faces the dual challenge of losing passive buying flows and rising financing difficulty.
- Key Details:
- In its November review, MSCI removed Strategy (from the MSCI USA Index), Metaplanet (from the Japan Small Cap Index), and Upexi (from the U.S. Micro Cap Index), effective after the close on November 30.
- The new framework first examines operating assets, then assesses indicators such as operating expenses, cash flow, fair value changes, and reliance on external financing to determine whether a company is closer to an investment vehicle; companies failing to pass for two consecutive annual reporting periods are deleted.
- Approximately 13 million MSTR shares are held by funds tracking GIMI indices, representing 3.1% of basic shares outstanding and roughly $1.57 billion in market value based on the November 10 closing price. JPMorgan previously estimated that the removal could trigger approximately $2.8 billion in selling, and if other index providers follow suit, the figure could reach $8.8 billion.
- Strategy emphasized that 13 million shares represent only about 60% of its 30-day average daily trading volume, arguing the impact is not material; however, low holdings do not equal low impact — rebalancing selling pressure still depends on fund positions and stock liquidity.
- Reduced passive buying will weaken treasury companies' ability to sustain stock premiums. As premiums narrow, maintaining the same pace of accumulation requires issuing more new shares; if the stock price falls below net asset value per share, further issuance would dilute existing shareholders' equity.
- ETH treasury company SharpLink remains on the watch list and was not included in this deletion, indicating that not all DATs are being phased out simultaneously — but continued accumulation alone is no longer sufficient to guarantee eligibility for mainstream index inclusion.
Original | Odaily (@OdailyChina)
Author | Asher (@Asher_0210)
Three crypto treasury companies ultimately failed to retain their MSCI index eligibility.
Early this morning, MSCI announced the results of its November 2026 index review. Strategy, Metaplanet, and SOL treasury company Upexi were all removed, with the related adjustments set to take effect after the close on November 30. Specifically, Strategy will exit the MSCI USA Index, Metaplanet will exit the MSCI Japan Small Cap Index, and Upexi will exit the MSCI USA Micro Cap Index. All three crypto treasury companies had previously been on the potential deletion list, and their removal has now been officially confirmed.
Months of opposition failed to change the outcome. For treasury companies whose primary mode of expansion is fundraising and holding tokens, should they be considered operating businesses or investment vehicles? MSCI's newly implemented "non-operating company" framework has drawn a boundary for this debate.
Three Companies Out: MSCI Draws the Line for "Operating Companies"
This removal is the result of MSCI's new "non-operating company" framework taking effect. Last year, MSCI proposed excluding treasury companies whose digital assets accounted for 50% or more of total assets from the relevant indices. In January of this year, the proposal was temporarily not implemented, and the review was subsequently expanded to "non-operating companies" across different asset classes. On October 15, MSCI announced the adoption of the new framework, to be implemented with the November index review.
The new framework first examines operating assets, then assesses whether a company is closer to an investment vehicle based on indicators such as operating expenses, operating cash flow, fair value changes, and reliance on external financing. Existing constituents that fail the screening in both of the most recent two annual reporting periods will be deleted. For treasury companies, retaining software, hotel, or consumer goods businesses may not be enough to maintain index eligibility. If a company's assets are primarily tokens, its financial performance largely tracks coin prices, and its expansion relies on external financing, its existing businesses may not be enough to change the screening outcome.
Ultimately, Strategy, Metaplanet, and Upexi all failed to retain their index eligibility, while ETH treasury company SharpLink remains on the watchlist and was not included in this round of deletions. This time not all DATs were removed simultaneously, but other treasury companies cannot guarantee allocation from mainstream indices merely by continuously increasing their token holdings.
Three Treasury Companies Face Passive Rebalancing Selling Pressure
After the three companies are removed, funds tracking the relevant indices will need to adjust their holdings, with the direct impact being reduced demand for allocations to their stocks. Among them, Strategy's potential selling pressure is the most closely watched. In its previous consultation response, the company disclosed that funds tracking the MSCI Global Investable Market Index (GIMI) held approximately 13 million MSTR shares, accounting for 3.1% of its basic share capital. Based on the closing price of $121.07 on November 10, the market value of these shares is approximately $1.57 billion.
JPMorgan estimated last year that Strategy's removal from MSCI could trigger approximately $2.8 billion in selling, and if other major index providers follow suit, the scale could increase to approximately $8.8 billion. Despite the market attention on the potential selling pressure, Strategy remains relatively calm about the impact of this adjustment. The company emphasized that the aforementioned 13 million shares represent only about 60% of its 30-day average daily trading volume, and therefore believes the adjustment will not have a material impact on the company. However, holdings below one day's trading volume can illustrate the stock's trading activity, but are insufficient to judge the impact of rebalancing on the stock price.
Metaplanet and Upexi similarly face pressure from relevant fund exits, but the actual selling pressure depends on their respective fund holdings and stock liquidity, and Strategy's scale cannot be applied to them. Metaplanet CEO Simon Gerovich has stated that the adjustment will not have a material impact on the company's business or Bitcoin strategy; Upexi has not yet made a public statement on the removal.
Even after the rebalancing selling pressure gradually subsides, the impact of reduced stock demand will persist. After exiting the relevant indices, even if these funds receive new subscription capital, they will no longer need to buy the three companies' stocks at their original weights. Beyond the one-time selling, the three companies have also lost a portion of ongoing passive buying.
Can Fundraising to Buy Coins Still Work?
Reduced passive buying may also affect treasury companies' ability to raise additional funds to increase holdings going forward. The ability of such companies to continuously accumulate crypto assets relies heavily on stock premiums. When the stock price is above net asset value per share, the company raises capital through share issuance, and the assets purchased have the opportunity to offset the dilution from equity expansion and increase the holdings per share. Investors are willing to pay a premium because they expect the company to accumulate more assets per share through subsequent purchases.
Once the premium narrows, the same amount of purchase capital would require issuing more new shares. If the stock price has already fallen below net asset value per share, continued share issuance could further reduce existing shareholders' net asset value per share, and the room for raising capital to increase holdings would also be constrained.
MSCI's removal will not directly force the three companies to sell crypto assets, but with less passive buying, maintaining the stock premium may become more difficult. If the stock price remains under pressure, the companies will have to choose between slowing purchases and accepting less favorable financing terms. The model of relying on premium financing and attracting investors through purchases will also become increasingly difficult to sustain.
Whether fundraising to buy coins can continue also depends on how much return the increased holdings can bring to shareholders. If the company holds more and more crypto assets but shareholders' assets per share do not increase, it will be difficult to get investors to buy into the next round of financing.
