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

According to a report by Cointelegraph, an analyst stated that the MSCI stock index is highly likely to decide to remove "Digital Asset Reserve Companies" (DATs) in January next year, which could put "enormous pressure" on these companies.

Charlie Sherry, head of finance at Australian cryptocurrency exchange BTC Markets, said he believes the likelihood of MSCI excluding digital asset reserve companies is “very high” because the index “only consults when it is inclined to make such a change.”

In October, MSCI announced that it was soliciting feedback from the investment community to discuss whether digital asset reserve companies with more than 50% of their balance sheets in crypto assets should be excluded from its indices. MSCI noted that some feedback suggested such companies "exhibit characteristics similar to investment funds, which are currently ineligible for index inclusion."

The consultation period will last until December 31, with a final decision to be announced on January 15 next year. Any resulting changes will take effect in February. MSCI is considering a preliminary list of 38 companies affected, including Michael Saylor's Strategy Inc., Sharplink Gaming, and cryptocurrency mining companies Riot Platforms and Marathon Digital Holdings.

Sherry pointed out that if MSCI decides to remove these companies, funds tracking the index will be required to sell, which in itself will put enormous pressure on the affected companies.

JPMorgan analysts had 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 that track indices.

Sherry believes that MSCI's move marks a shift in tone. Over the past year, corporate strategies for heavy crypto assets were seen as innovations 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.