MSCI is highly likely to remove "digital asset reserve companies," which will put enormous pressure on these companies.

According to Cointelegraph, an analyst stated that MSCI is highly likely to decide to remove "Digital Asset Reserve Companies" (DATs) from its stock market indices in January, which could put "significant pressure" on these companies. Charlie Sherry, Head of Finance at Australian cryptocurrency exchange BTC Markets, said he believes the likelihood of MSCI excluding DATs is "very high," as the index "only consults when it is inclined to make such a change." In October, MSCI announced it was soliciting feedback from the investment community on whether DATs with more than 50% crypto assets on their balance sheets should be excluded from its indices. MSCI noted that some feedback suggested these companies "exhibit characteristics similar to investment funds, which currently do not qualify for index inclusion." The consultation period will last until December 31, with a final decision announced on January 15, and any resulting changes taking effect in February. MSCI's initial list of companies under consideration for removal includes 38 companies, such as Michael Saylor's Strategy Inc., Sharplink Gaming, and cryptocurrency mining companies Riot Platforms and Marathon Digital Holdings. Sherry points out that if MSCI decides to remove these companies, funds tracking the index will be required to sell, which in itself will put significant pressure on the affected companies. JPMorgan analysts previously warned that Strategy Inc. could face a $2.8 billion outflow if MSCI proceeds with the removal. Of Strategy Inc.'s estimated $56 billion market capitalization, approximately $9 billion is linked to its passive funds tracking the index. Sherry believes that MSCI's action marks a shift in tone. Over the past year, corporate strategies targeting heavy crypto assets have been seen as innovation in capital markets, but now major index providers are tightening their definitions, indicating that the market is moving from an "anything goes" phase back to a more conservative filtering mechanism.