Strategy stock climbs as MSCI halts plan to drop DATCOs from its indexes
Shares of Michael Saylor’s company Strategy rallied on Wednesday after index provider MSCI put on hold its proposal to remove the firm and other so‑called Digital Asset Treasury Companies, or DATCOs, from major equity benchmarks.
Strategy, which rebranded from MicroStrategy, is widely seen as the flagship example of a DATCO. The company uses its balance sheet primarily to accumulate Bitcoin, and defines a Digital Asset Treasury Company as a business in which digital assets such as Bitcoin account for at least half of total balance sheet assets. In effect, these firms operate as hybrid entities: traditional operating companies whose market value is heavily influenced by the crypto they hold.
The DATCO label gained traction in 2025 as more publicly listed corporations began treating Bitcoin, Ether and other tokens as strategic reserves rather than speculative side bets. By adding digital assets to their treasuries, these companies offered investors an indirect way to gain exposure to crypto through conventional stock markets, bypassing the need to custody coins or navigate dedicated crypto exchanges.
That model has attracted a growing base of institutional and retail shareholders, but it also imported crypto’s trademark volatility into the equity market. Share prices of DATCOs tend to react not only to fundamentals such as revenue and earnings, but also to rapid price swings in their token holdings. A sharp overnight move in Bitcoin can erase or create billions of dollars in market value before the equity market even opens.
Valuation remains one of the most contentious issues around DATCOs. Analysts are split on whether these stocks should be assessed primarily as operating businesses that just happen to hold digital assets, or as quasi‑holding vehicles where the underlying crypto stash is the main driver of fair value. Accounting rules are still catching up, and the treatment of unrealized gains and losses on digital assets varies widely, creating additional uncertainty for investors trying to build models.
MSCI’s decision to pause, rather than immediately enforce, the exclusion of DATCOs does not resolve these structural questions. According to Clear Street analyst Owen Lau, the move mainly removes a looming technical overhang for crypto‑linked equities. Had MSCI gone ahead with ejecting DATCOs from its indexes, funds tracking those benchmarks would likely have been forced sellers, amplifying price pressure. For now, that risk has been pushed back.
Market participants expect MSCI to lean toward “grandfathering” companies like Strategy and other established DATCOs that are already inside its indexes while potentially applying stricter criteria to newcomers. Such an approach would allow the index provider to address concerns about fund‑like entities slipping into equity benchmarks without triggering immediate disruption in passive portfolios that already hold these names.
MSCI originally floated the idea of stripping DATCOs from its global indexes last autumn. The firm argued that businesses whose primary function is to stockpile and hold financial assets resemble investment funds more than operating corporations. Investment funds are typically excluded from broad equity indexes to keep benchmarks focused on companies that generate revenue through goods and services rather than asset management.
DATCOs pushed back, insisting they are genuine operating companies building software, analytics tools, or other products, with corporate treasuries that happen to be heavily skewed toward digital assets. Executives argued that the proposal unfairly targeted crypto while allowing companies loaded with traditional financial instruments or commodities to remain eligible.
Strategy was one of the earliest and most aggressive adopters of the crypto‑treasury playbook, first purchasing Bitcoin in 2020 and then repeatedly tapping capital markets to expand its holdings. That decision transformed the stock into a leveraged bet on Bitcoin’s long‑term trajectory, drawing in both crypto enthusiasts and skeptics who trade around the company’s exposure.
Following MSCI’s pause, Strategy shares climbed as much as 3.2% in early trading before surrendering part of those gains when Bitcoin slipped to around 90,900 dollars. The intraday reversal underscored how tightly the stock’s performance is tethered to movements in the underlying token. Even seemingly technical decisions by index providers can move prices, but the dominant driver remains the direction of the crypto market itself.
Despite choppy trading, Strategy is still up more than 4.5% since the start of the year, reflecting persistent demand for listed vehicles that offer a blend of business operations and digital asset exposure. For some investors constrained from direct crypto ownership, these stocks have become a practical workaround that fits within existing mandates and custodial arrangements.
The MSCI pause also highlights a deeper debate within global finance: how to classify and regulate companies that straddle the line between traditional corporates and digital asset investment vehicles. If regulators and index providers ultimately decide that any business with a large crypto treasury is effectively a fund, many existing corporate strategies may have to be rethought. Conversely, if DATCOs are accepted as a distinct but legitimate corporate model, capital allocation into digital assets at the treasury level could accelerate.
There are also implications for market structure. Index inclusion or exclusion shapes which investors can hold a stock, how liquid it becomes, and how its price reacts to macro shocks. Passive funds that track MSCI benchmarks collectively manage significant sums; a forced rotation out of DATCOs could have depressed valuations, widened bid‑ask spreads, and made it harder for these companies to raise capital. By stalling the exclusion, MSCI has effectively preserved the status quo while it reassesses how to handle the segment.
For corporate finance teams, the episode serves as a reminder that adopting a Bitcoin‑heavy treasury comes with second‑order consequences. Beyond balance sheet volatility and accounting complexity, there is now a tangible risk that a company’s equity profile—index membership, analyst coverage, and investor base—can change abruptly if digital assets dominate the books. Boards considering a DATCO‑style strategy must weigh potential upside in share price and publicity against these structural uncertainties.
Investors, in turn, are learning to differentiate between various flavors of crypto‑exposed stocks. Some DATCOs generate significant cash flow from core operations and treat digital assets as a strategic reserve. Others rely more heavily on capital markets and equity issuance to acquire tokens, effectively creating a leveraged structure. The MSCI debate may encourage more granular classification of these models, rather than treating all crypto‑treasury companies as interchangeable.
In the longer term, the outcome of MSCI’s review could set a template for how other index providers approach digital‑asset‑heavy companies. If MSCI formalizes criteria based on asset composition, risk profile, and operational substance, competitors may adopt similar standards, leading to a more consistent global framework. Until then, DATCOs like Strategy operate in a gray zone—embraced by some investors as innovative vehicles for digital asset exposure, and viewed by others as misclassified funds that challenge the boundaries of traditional equity indexes.
For now, the immediate takeaway for markets is straightforward: the worst‑case scenario of an imminent forced exodus of DATCOs from major benchmarks has been avoided. Strategy’s share price reaction reflects relief that, at least in the near term, the company will continue to sit inside the mainstream index ecosystem rather than being pushed to the sidelines with specialized or niche vehicles. How stable that position proves to be will depend on the next round of decisions from MSCI and on the still‑unfolding experiment of putting large amounts of Bitcoin and other tokens on public corporate balance sheets.