Bitcoin Coalition Pushes Back Against MSCI Proposal Targeting Bitcoin-Heavy Companies

Klarna, the Swedish fintech company, has announced a partnership with Privy, a Stripe-owned entity, to develop features for crypto wallets, following its recent launch of the KlarnaUSD stablecoin. This collaboration aims to enhance the integration of cryptocurrency within Klarna's ecosystem.

Satsuma Technology has sold 579 of its 1,199 Bitcoin holdings, raising approximately £40 million as it prepares for a planned uplisting on the London Stock Exchange. This strategic move comes alongside significant changes in the company's board structure, indicating a shift in its operational focus.

MSCI has initiated a consultation regarding the potential exclusion of companies with significant cryptocurrency or Bitcoin holdings from its main indices, a move that has sparked considerable debate in the financial markets. This proposal specifically targets firms whose balance sheets contain over 50% in crypto assets, raising concerns about the implications for those companies.

A recent report indicates that approximately 65% of corporate Bitcoin treasuries are currently experiencing unrealized losses, primarily due to Bitcoin's price drop below $90,000 in November. This significant decline has left many corporate holders in a precarious financial position as they navigate the volatile cryptocurrency market.

Strategy, formerly known as MicroStrategy, has formally opposed MSCI's proposal to exclude digital asset treasury companies from its indexes, arguing that the threshold of 50% digital assets on balance sheets is misguided and could harm the broader cryptocurrency market. The firm, led by Michael Saylor and CEO Phong Le, emphasizes the need for fair treatment of digital asset companies in index eligibility criteria.

MSCI is considering excluding Bitcoin and other digital asset treasury companies from its global indexes if their balance sheets contain over 50% in crypto assets. This proposal has sparked significant debate within the cryptocurrency community, with various stakeholders voicing their concerns.

Bitcoin's price surged above $94,000 following a 25 basis point cut in the Federal Reserve's benchmark rate, which now stands at 3.50%–3.75%. This move aims to support job growth and address high inflation levels, reflecting a significant moment in the cryptocurrency market.

Strategy has responded to a letter from MSCI, making a case for its inclusion in the MSCI indexes by arguing that digital asset treasuries operate as businesses with a single-asset focus. This comes amid concerns of potential removal from these indexes, which could significantly impact the company.