Technique, the world’s largest Bitcoin treasury firm, has submitted a proper response to MSCI’s consultation on digital asset treasury corporations (DATs), urging the index supplier to not exclude corporations whose digital asset holdings exceed 50% of complete property.
In its detailed letter to the MSCI Fairness Index Committee, Technique argued that the proposed threshold is “misguided” and would have “profoundly dangerous penalties” for each traders and the broader digital asset trade.
Based in 1989, the corporate operates as a corporate treasury and capital markets enterprise with important Bitcoin holdings, providing traders a spread of fairness and fixed-income securities backed by its digital property.
In keeping with the corporate, its mannequin is basically completely different from a passive funding fund. Technique actively makes use of its Bitcoin reserves to generate returns for shareholders, offering novel monetary devices akin to conventional financial institution and insurance coverage merchandise.
The corporate emphasised that “DATs are working corporations, not funding funds,” noting that its operational flexibility permits it to adapt its enterprise mannequin because the expertise evolves.
Technique calls MSCI’s logic “arbitrary, and unworkable.”
Technique criticized MSCI’s proposal for introducing a digital-asset-specific 50% threshold, calling it “discriminatory, arbitrary, and unworkable.”
The corporate highlighted that many conventional companies — together with oil corporations, timber operators, REITs, and media companies — additionally preserve concentrated holdings in single asset sorts however aren’t handled as funding funds.
The corporate warned that worth volatility, differing accounting requirements, and asset valuation modifications would create index instability, inflicting DATs to whipsaw out and in of MSCI’s indices.
The letter additional argued that the proposal would inappropriately inject coverage concerns into index building.
“MSCI has constantly held itself out as offering indices that precisely and objectively measure market efficiency,” Technique wrote.
Excluding DATs based mostly on the kind of property they maintain, quite than the underlying enterprise mannequin, may compromise MSCI’s neutrality and mislead traders about how these corporations function.
Technique famous that its traders purchase publicity to the corporate’s administration and innovation capabilities, not merely to Bitcoin itself, citing historic buying and selling patterns through which the corporate’s inventory usually outperformed the underlying worth of its digital holdings.
Technique: Digital property are well-liked in authorities coverage
The corporate additionally framed the controversy within the context of U.S. financial coverage. Technique famous that the federal authorities, beneath President Trump, has made digital property central to nationwide financial endeavors, together with the institution of a Strategic Bitcoin Reserve and selling entry to digital property in retirement accounts.
Excluding DATs from MSCI indices would, the letter argued, battle with these insurance policies and chill innovation in a nascent sector.
Analysts cited within the letter estimate that Technique alone could face up to $2.8 billion in stock outflows if MSCI implements the exclusion, with broader implications for the rising digital asset economic system.
Technique positioned itself inside a historic context, evaluating the rise of digital asset treasuries to earlier industrial leaders.
The letter highlighted examples like Commonplace Oil, AT&T, Intel, and NVIDIA, noting that these corporations made concentrated investments in rising applied sciences that had been initially seen as dangerous however finally turned foundational to financial development.
Equally, the letter argued, digital asset treasuries are constructing vital infrastructure for a brand new monetary system.
Don’t succumb to ‘short-sightedness’
The letter concluded by urging MSCI to reject the 50% threshold, citing the danger of stifling innovation, damaging index integrity, and undermining federal technique. Technique beneficial that MSCI permit the market to proceed evolving and conduct extra thorough session earlier than contemplating any coverage that might differentiate DATs from different working corporations.
The corporate invoked MSCI’s precedent in reorganizing the Communication Providers sector after almost 20 years of trade evolution, suggesting a measured, deliberative strategy.
“Historical past exhibits that when foundational applied sciences have emerged, establishments that prospered allowed markets to check them quite than throttling them prematurely,” Technique wrote. “MSCI can both succumb to short-sightedness or permit its indices to replicate, neutrally and faithfully, the subsequent period of monetary expertise.”
Elsewhere, corporations like Strive and Bitcoin For Companies also challenged MSCI’s resolution.
