MSCI’s Potential Crypto Ban: Is a Crypto Sector Shake-Up Coming?
Excluding DATs with more than 50% of their assets in Bitcoin or other cryptocurrencies is something the MSCI is considering. They contend that rather than conducting businesses, these organizations operate more like investment funds. Professionals in cryptocurrency, however, are against this potential action. They contend that doing so might prevent investors from accessing a profitable market sector. Furthermore, the concept has not just sparked intense criticism from the sector. Leaders like Strive Asset Management’s Vivek Ramaswamy and Strategy’s Michael Saylor have also criticized it. With a final decision anticipated at the start of next year, the MSCI revealed its potential exclusion plans in October.
Institutional Investors May Suffer If MSCI Excludes Crypto-Focused Firms
The MSCI strategy may backfire and disappoint institutional investors, according to Fireblocks CEO Adam Levine. Fireblocks CEO said institutional investors have warmed up to crypto in recent years and may need to rebalance to track the index. MSCI risks overlooking crucial market actors, Levine said. If it excludes crypto-significant enterprises, this might happen. Considering that businesses are innovating with tokenized equities and stablecoins, he compared it to purposely ignoring early internet startups 30 years ago.
GSR head of OTC trading Spencer Hallarn said MSCI and other index providers’ DAT exclusions affect the business. Businesses’ crypto assets are also affected by these actions. However, he believes the exclusion decision was carefully considered and that the market has priced it in. He commented that this was expected.
NASDAQ Crypto Firms Fight to Stay in MSCI Index Amid Exclusion Plans
Nasdaq-listed Strive Asset Management is one of numerous crypto businesses lobbying MSCI to reconsider its exclusion plans. The company claims that banning BTC-focused DATs is unreasonable because they are essential to structured finance and AI infrastructure. Strive CEO Matt Cole also believes the proposed exclusion misunderstands the role of large Bitcoin enterprises in new industries, particularly AI. Possible exclusion targets MARA, Riot Platforms, and Hut 8 are growing into AI by repurposing data centers for high-intensity computational workloads. Cole added that these companies will have large Bitcoin reserves despite rising AI revenue. He claims that MSCI’s exclusion will permanently isolate a crypto industry sector at the junction of next-generation computing and crypto.
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