Strategy: MSCI's proposed 50% Bitcoin threshold risks triggering "violent volatility" in the index and conflicts with US innovation policy.

Odaily Planet Daily reports that Strategy has sent a letter to the MSCI Equity Index Committee, urging it to abandon a proposal that would prohibit companies with digital asset holdings exceeding 50% of their total assets from being included in its global equity benchmark. Strategy warns that this move would cause significant index volatility and contradict the US government's policy of promoting innovation in digital assets.

Strategy argues that companies holding Bitcoin assets will "drastically move in and out" of major indices if Bitcoin prices fluctuate or accounting standards differ, causing confusion for index providers and investors. MSCI counters that digital asset reserves (DATs) companies like Strategy and BitMine are more like investment funds than traditional operating businesses.

Strategy points out that the rule is difficult to apply consistently because IFRS reporting companies can price Bitcoin at cost, while US GAAP requires quarterly fair value marking. Strategy is the largest publicly disclosed Bitcoin holder, holding 660,624 BTC, worth nearly $61 billion. JPMorgan analysts estimate that if Strategy is removed, it could face approximately $2.8 billion in passive capital outflows. MSCI is expected to make a final decision by January 15th.