The technical freeze imposed by global index giant MSCI has caused crypto treasury companies, known for their "perpetual motion machine" model with Bitcoin, to lose a core automatic funding replenishment engine.
On January 8, 2026, MSCI announced that it would retain the position of "digital asset treasury companies" in its global index during the quarterly assessment in February. At the same time, it implemented a freeze on technical parameters such as the number of circulating shares for these companies, meaning that any future stock issuance by these companies would no longer automatically attract passive funds tracking the index.
Following the announcement, the stock price of the representative company Strategy surged over 6%.
01 Index Game
● The source of this game dates back to October 2025, when MSCI proposed to exclude companies holding 50% or more of their total assets in digital assets from its global investable market index. Digital asset treasury companies, led by Strategy (formerly MicroStrategy), faced the crisis of being "kicked out of the group chat."
● This proposal was immediately met with strong opposition from the industry, represented by Strategy. In an open letter to MSCI, Strategy sharply questioned: oil giants, real estate investment trusts, and other companies also hold a highly concentrated single category of assets but are not treated specially; limiting only digital asset companies is suspected of double standards.
● The opposing voices hit the soft spot of the proposal. The extreme volatility of digital asset prices could lead companies to repeatedly enter and exit the index due to changes in asset value, compounded by differences in accounting standards, making actual operations extremely difficult.
02 Balancing Strategy
Faced with the wave of opposition and the complexity of reality, MSCI ultimately chose a middle path. It announced a postponement of the exclusion proposal but simultaneously implemented a series of technical restrictions on such companies.
● According to the announcement, MSCI will not make adjustments based on "number of circulating shares," "foreign inclusion factor," or "domestic inclusion factor" increases for these securities. Additionally, it will postpone all "size segment migrations" for such companies and will temporarily not accept new companies of this type into the index.
● This means that even if these companies' market capitalization grows to meet the large-cap standards, they can only remain in their original positions and cannot enjoy the weight increase that comes with size upgrades.
03 Core Mechanism
MSCI's freeze policy precisely targets digital asset treasury companies, especially the core capital operation model that Strategy relies on for expansion—"infinite capital circulation."
● This cycle consists of three key links. The company, optimistic about cryptocurrencies, raises funds through the capital market by issuing additional shares or convertible bonds. Such issuances typically lead to share dilution, which theoretically could suppress stock prices.
● When the number of circulating shares increases, passive funds tracking mainstream indices like MSCI are required by rules to proportionally increase their holdings to match the weight they should have in the index. This buying demand is "price insensitive," providing certainty support for new stock issuances.
● The stability or increase in stock prices reduces the cost of the company's next round of financing through stock issuance. The company can raise more funds with fewer shares, allowing it to purchase more cryptocurrencies, forming a positive cycle.
04 Power Shift
● MSCI's freeze decision precisely cuts off the core gear of this cycle. Even if Strategy issues a large number of new shares in the future, MSCI will completely ignore the newly issued shares when calculating its index weight.
● With the company's index weight locked, the large-scale passive funds tracking the index have no obligation to purchase these newly issued shares.
● A model from crypto research firm Bull Theory quantified this impact: Assuming a digital asset treasury company issues 20 million new shares, under the old rules, index rebalancing would force passive funds to buy 10% of them. Assuming a price of $300 per share, this means a certain buying power of up to $600 million.
Under the new rules, this $600 million of "mechanical buying" will directly drop to zero. Companies like Strategy must now completely turn to active investors, relying on their recognition of the company's fundamentals to raise funds.
The table below clearly shows the differences between the old and new mechanisms:
05 Rise of Competitors
With the disappearance of "automatic buying," the market structure is undergoing profound changes, and new competitors are beginning to fill the liquidity gap.
● Emerging companies like 21 Capital are trying to mimic the MicroStrategy model, but they emphasize the "purity" of investments to stand out in the competition. Meanwhile, spot Bitcoin ETFs are solidifying their position as "silent winners."
● For large asset allocators, rotating funds from single company stocks that carry specific corporate risks to simpler, more liquid, and transparently priced spot Bitcoin ETFs is becoming a more logical choice.
● Michael Novogratz, the founder and CEO of Galaxy Digital, known as the "super bull of cryptocurrency," pointed out in August 2025 that the trend of treasury companies mimicking the Strategy model may have peaked.
● He believes that the real next wave of digital assets will be the tokenization of real-world assets, which involves migrating traditional assets like stocks and bonds onto the blockchain in the RWA movement.
06 Future Challenges
For Strategy and similar companies, the future development path must undergo profound adjustments. The model of relying on continuous large-scale stock issuances for expansion is becoming unsustainable.
● The focus of the company's management needs to shift from sophisticated "financial engineering" operations to more solid "corporate fundamentals" building. This includes creating sustainable non-Bitcoin related revenue businesses, improving corporate governance, and providing shareholders with more transparent financial communication.
● Strategy needs to explore other financing channels such as bonds and bank loans, and genuinely persuade active investors to hold its stock based on its intrinsic value rather than index arbitrage mechanisms.
● The investment narrative of crypto treasury companies may need to shift from being "high-leverage Beta tools for Bitcoin" to "excellent operating companies proficient in Bitcoin asset management." This means their value will depend more on their active management capabilities for cryptocurrencies rather than just the absolute quantity of Bitcoin on their balance sheets.
An industry observer compared the end of the MicroStrategy model to a "printing press jam." This company once used clever capital operations to make its stock issuances resemble printing money, always having index funds as the ultimate buyers.
Now this printing press is jammed by MSCI's technical adjustments. Although MicroStrategy's stock price has temporarily avoided the cliff of passive selling, the road ahead requires convincing the market based on real profitability and business models.
In the conference rooms of Wall Street, analysts are recalculating the valuation models for digital asset companies. Next to the simple formula of "Bitcoin holdings × stock price," new complex variables such as "active investor acceptance" and "sustainable financing capability" have been added.
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