MSCI plans to remove Strategy from certain indices, potentially triggering $2.8 billion in passive selling. But more worth asking than the capital impact is: is a company defined by what it holds, or by how it creates value? Behind the Bitcoin debate is a head-on collision between the new economy and the old framework.
Is a company ultimately defined by what it holds, or by how it creates value?
On October 15, global index provider MSCI announced that it will implement new screening rules for non-operating companies in its global investable market indexes. Strategy (formerly MicroStrategy, MSTR) therefore faces the risk of being removed from some indexes. MSCI plans to publish the final list of affected companies on November 11, with the related adjustments taking effect after the close on November 30.
The market's first focus is the capital impact. Analysts had previously estimated that if Strategy were removed, potential passive fund outflows could reach US$2.8 billion. But more worth discussing than share price volatility is the debate over corporate definition underlying this controversy:
Does the economic essence of a company depend on what assets it holds, or on how it organizes capital, conducts business, and creates value?
A debate that starts with Bitcoin but does not end with Bitcoin
This debate did not begin this week.
In September 2025, Japanese company Metaplanet announced a large-scale share issuance and planned to use 95% of the proceeds to buy Bitcoin. MSCI subsequently launched a market consultation to discuss whether digital asset treasury companies should continue to be included in global equity indexes. The initial proposal focused on companies whose digital assets accounted for 50% or more of total assets; in January 2026, MSCI paused implementation of that proposal and instead studied broader criteria for identifying non-operating companies. The new rules announced on October 15 are a continuation of that approach.
The new rules no longer draw the line solely based on the proportion of digital asset holdings. Instead, they first screen operating assets, then apply five financial indicator tests to companies that fail the initial screening, and establish a buffer mechanism. For existing constituents, removal decisions also involve screening results over two consecutive annual reporting periods. The rules do not cover only Bitcoin treasury companies; they also include companies such as Yellow Cake plc, which invests in physical uranium.
MSCI's concerns are not hard to understand. Equity indexes need to maintain relatively clear investment targets: if the main activity of a listed company is merely holding financial assets, investors buying its shares may obtain only indirect exposure to the underlying assets. If all investment vehicles wrapped in corporate form could enter equity indexes, the boundary between operating companies and investment funds would blur.
But if a company has built a sustained system of financing, securities design, and capital allocation around a certain asset, is it still merely an investment vehicle?
This is precisely the core of the debate between Strategy and MSCI.
What MSCI sees is the asset; what Strategy emphasizes is the mechanism
From a balance sheet perspective, Strategy's core assets are highly concentrated in Bitcoin. Bitcoin itself does not generate operating revenue, and appreciation of holdings is not equivalent to selling products or providing services. MSCI therefore has reason to examine whether the company is closer to an investment vehicle.
Strategy's rebuttal does not deny the importance of Bitcoin; rather, it argues that the company's economic activity cannot be reduced to holding coins. It raises funds through instruments such as common stock, convertible bonds, and preferred stock, then allocates capital to Bitcoin and designs differentiated risk and return structures for different investors. In Strategy's narrative, Bitcoin is not merely an asset that is held, but also the basis on which its capital market products and financing mechanisms operate.
The two are not focused on the same thing: MSCI needs a unified, executable index classification standard; Strategy wants the market to recognize that its securities design, financing, and capital allocation activities constitute a business model. This is not simply a matter of who is right or wrong, but of the potential tension between classification rules and the economic substance of a company.
**We are inclined to believe that asset structure can describe what risks a company bears, but it is not sufficient on its own to define how it creates value.** Conversely, however, continuous financing and buying Bitcoin do not automatically mean that a sustainable operating advantage has been formed. The key remains the economic results: can Strategy continue to raise funds at a reasonable cost? Can growth in Bitcoin exposure per share cover financing costs and equity dilution? Do its differentiated securities products meet real, stable investment demand?
These questions are more meaningful than simply labeling Strategy an "operating company" or an "investment vehicle."
Therefore, we believe that directly substituting asset structure for analysis of the business model is insufficient. The proportion of Bitcoin holdings can describe Strategy's asset structure, but it cannot alone define its business model. MSCI can establish its own index eligibility rules, but if a classification method does not adequately identify a company's real economic activity, then it is necessary for that method to be re-examined.
The lesson from Berkshire Hathaway: capital allocation can also become a core capability
In business history, it is not uncommon for the source of a company's value to change. Berkshire Hathaway was originally a textile company and later gradually transformed into a conglomerate centered on insurance operations, business holdings, and capital allocation. After acquiring National Indemnity in 1967, the insurance business and its float became an important source of funds, and Buffett and his team continued to allocate capital to businesses and assets with greater long-term return potential.
The Berkshire story shows that a company's core competitiveness is not necessarily equivalent to what it originally produced. Funding sources, organizational structure, and capital allocation capability can also become important sources of long-term value.
From this perspective, the question raised by Strategy is not entirely without precedent. If a company has built sustained financing channels, differentiated financial products, and a capital allocation mechanism around a core asset, then the market does indeed need to study further: does its competitive advantage come from the underlying asset itself, or from the ability to organize capital and transform it into assets?
Berkshire has already proven this capability through long-term operating results; Strategy is still in the process of proving itself.
Old frameworks need to understand the new economy, and the new economy also needs to prove itself
Returning to the MSCI controversy, index providers have a responsibility to maintain consistency in classification, and it is impossible for them to design evaluation standards separately for every company. But if uniform rules cannot adequately identify new business models, they may also underestimate the real economic activity of certain companies.
If the operating activities of a company are undergoing fundamental changes while the classification system still relies only on historically formed indicators to understand it, then that classification may also lose its explanatory power regarding economic reality. The competitive advantages of modern companies are increasingly likely to come from software, networks, financial engineering, data, and capital organization capabilities, rather than only from factories, equipment, and products in the traditional sense. For these new types of companies, what we need is not to abandon classification, but to establish more explanatory classification methods that can distinguish different business models.
Strategy is trying to prove that Bitcoin can be not only an asset, but also the foundation of a system of capital organization and allocation. Whether it can truly establish a long-term competitive advantage still needs to be tested by the market over time and through economic results. But before reaching a conclusion, we should at least first understand what it is trying to build.
Historically, new types of companies have often first changed the way value is created, and only afterward changed the way people understand them.
This was true of Berkshire's transformation, and it is also true of the rise of many platform companies. What is truly worth investing in is not companies that merely cannot be explained by old frameworks, but companies that have established new value creation mechanisms and ultimately proven themselves through economic results.
Old frameworks need to understand the new economy, and the new economy likewise needs to prove itself.