TLDR
- MSCI advises on whether Bitcoin, Ethereum and Solana’s financial companies should be classified as funds rather than companies.
- Michael Saylor responded by emphasizing that his company operates as a traditional corporation, not a fund or trust.
- MSCI’s potential reclassification could see companies holding large crypto reserves removed from major stock indexes.
- Saylor emphasized that his company innovates through a unique financial strategy rather than simply holding assets.
- MSCI is expected to make a final decision on the reclassification of these companies by January 15, 2025.
MSCI is currently consulting on companies that hold large reserves of Bitcoin (BTC), Ethereum (ETH) and Solana (SOL) should be reclassified as investment funds rather than traditional companies. This includes companies like Michael Saylor’s Strategy, which has a strategy focused on Bitcoin treasury. Saylor has responded to the consultation, stressing that his company operates as a traditional company, not a fund or trust.
Saylor responds to MSCI consultation
Michael Saylor has publicly addressed MSCI’s consultation on the reclassification of companies holding significant cryptocurrency reserves. In a recent post, Saylor made it clear that their company does not align with mutual funds or trusts.
“Our business is focused on creating value through innovation, not just holding assets,” he stated.
Saylor further explained that their strategy is long term and rooted in the belief that Bitcoin is a form of “productive capital”. He noted that the company’s mission remains focused on building “the world’s first digital monetary institution” based on sound monetary principles and financial innovation.
MSCI’s consultation could affect companies like Saylors, which has over 50% of its reserves in cryptocurrency. If MSCI decides that such companies should be classified as investment vehicles, they may be excluded from major equity indices such as MSCI USA and MSCI World. This would be a significant change in how MSCI views these companies, which are currently classified as traditional companies.
MSCI Index Impact on Bitcoin Treasury Companies
MSCI’s consultation could have far-reaching effects, especially for companies like Saylor’s, which has a significant amount of Bitcoin in its treasury. The MSCI index typically excludes mutual funds and trusts from its stock indices. If MSCI decides to reclassify companies holding crypto reserves as investment funds, these companies may be removed from the index.
Saylor emphasized that no passive fund or trust could match his company’s operations. “We’re not sitting on investment, we’re innovating and building a business,” he said. His company has raised billions of dollars through public offerings of digital credit securities, highlighting its active role in financial markets.
The debate revolves around the unique structure of companies like Strategy, which combine elements of software development and treasury management. These companies see Bitcoin as a tool to create long-term value, not as a passive asset to hold. As such, they argue that their business model should not be compared to mutual funds or trusts.
Ethereum and Solana Treasury Companies also under review
MSCI’s consultation may extend beyond Bitcoin financial companies. Ethereum and Solana treasury companies, such as Tom Lee’s BitMine, may also be subject to similar scrutiny. Although these companies have significant crypto assets, they engage in activities such as staking and running validators, which can differentiate them from traditional funds or trusts.
These activities could strengthen the case for classifying Ethereum and Solana’s financial company as businesses rather than investment vehicles. By participating in decentralized finance (DeFi) and actively managing their crypto holdings, they claim their business is more in line with traditional businesses than with passive investment vehicles.
But for companies like Saylor’s, which focuses on Bitcoin as its primary asset, the difference is still harder to define. MSCI’s decision is likely to have a lasting impact on how the market views these unique crypto treasury strategies. The final decision by MSCI is expected by January 15, 2025.
MSCI’s upcoming decision on whether to reclassify Bitcoin, Ethereum and Solana’s financial companies will have significant implications. Companies like Saylor’s Strategy, which hold large Bitcoin reserves, could face exclusion from major indexes if classified as mutual funds. This development is one of the latest signs of how the cryptocurrency sector is evolving within traditional financial frameworks.
