The news that MSCI, one of the world’s “Big Three” index providers, is looking to potentially exclude digital asset troves (DATs) from its indices has absolutely scandalized the crypto community. JP Morgan’s mention of this in its Strategy research note only added fuel to the fire, and the term “Operation Chokepoint” returned to the Crypto Twitter lexicon. However, MSCI may be right when it comes to DAT.
MSCI is one of the world’s largest index providers, with more than $18 trillion in ETFs and institutional assets tracking its benchmark indices. As such, investor protection is a key part of their role and indeed they state this clearly and repeatedly in their index methodology documents. If they approve the inclusion of an asset in one of their indices, it has real influence. And unfortunately, it is questionable whether DATs actually meet these benchmarks.
The rise and fall of DATs
Until very recently, Strategy (formerly MicroStrategy) was the only Bitcoin treasury game in existence. Originally a software company, Strategy (under the symbol MSTR) increasingly moved away from its core business under the leadership of Michael Saylor to essentially become a leveraged BTC operation listed on the traditional stock market.
And as a result he did very well. From its first Bitcoin purchase in August 2020 to its peak in June 2025, MSTR’s stock price skyrocketed more than 3,000%. In fact, it was so successful that many other companies decided they wanted a piece of the pie. And so, this year, the DAT trend skyrocketed: their number increased from just 4 in 2020 to 142 in October 2025, more than half of them emerging this year alone. Now we even have corporate entities investing in tokens like DOGE, ZEC or WLFI, whose volatility is much higher than that of BTC.
But that’s not the only problem. Many of these new corporate entities raised funds to purchase cryptocurrencies on much more unfavorable terms than Strategy, whose unsecured convertible debt gives it great flexibility when it comes to payments. Meanwhile, others have issued collateralized debt (meaning they face stricter collateral demands and have much less room to maneuver) and have also purchased cryptocurrencies at much higher average prices.
maximum pain
As a result, DATs are now being hit by the brutal cryptocurrency sell-off of recent weeks. The drop nearly halved the combined market capitalization of DATs from July’s peak of $176 billion to around $99 billion in mid-November, while many now trade below their net asset values (NAV). For investors looking to buy these stocks at this time in the market, this can potentially represent a discount, if they see future value, which is a big if. Meanwhile, early investors are feeling the consequences, as crypto treasury bond share prices fall.
Even Strategy stock is down 40% so far this year, and Tom Lee’s BitMine is trading nearly 80% below its all-time high (although the stock is up nearly 300% year to date). Saylor and Lee, however, have structured their vehicles well enough to afford to buy the dip, which they have both been doing. Others have not fared so well.
After their shares suffered brutal sell-offs, several DATs have already been forced to sell their cryptocurrency holdings (almost certainly at a loss) to fund share buybacks. A few weeks ago, ETH treasury firm ETHZilla sold $40 million in tokens, while FG Nexus was forced to sell over 10,922 ETH to buy back around 8% of its publicly tradable shares. Similarly, in early November, BTC treasurer Sequans sold 970 Bitcoin to redeem half of its convertible debt. These types of forced liquidations are very unusual for publicly traded companies, especially so soon after launch, and clearly point to structural problems.
It really feels like we’re watching the dominoes start to fall, and we’re not even close to a crypto winter yet. For now, this is nothing more than a relatively standard bull market correction. That’s why it’s particularly worrying that these companies are suffering so much now: what will happen if we see something more like the 2022 recession?
As someone who closely watches the cryptocurrency market on a daily basis, I have long been concerned about the systemic risk of DATs. So why shouldn’t MSCI worry about including these assets in its indices? Its approval would indicate that DATs are investable, well governed and sufficiently transparent. Conversely, excluding them suggests an unacceptable level of risk, structural issues, or liquidity or governance concerns. It’s easy to see how many DATs fall into the latter category.
The TradFi game
Of course, not all DATs are created equal. While a large proportion of the crypto companies on the market today probably won’t survive a real recession, companies like BitMine and Strategy will almost certainly be fine. So there is the argument that MSCI is throwing the baby out with the bathwater when it comes to these companies.
Overall, however, MSCI is not wrong to be cautious with DATs. Many of them are risky vehicles that have jumped on the hype train in hopes of making quick profits. Excluding them from major investment indices is not a sign of some kind of coordinated attack on cryptocurrencies as a whole; it is simply that TradFi is cautious and seeking to protect investors.
And as cryptocurrencies become more integrated with the traditional financial ecosystem, this is part of it that all of us will simply have to accept. These are the growing pains that come with a major change. But in the end, these strict standards could be a blessing in disguise. Over time, they can strengthen the case for legitimate digital asset treasuries, while weeding out risky and poorly structured companies before they can become a systemic risk.
