MSCI Considers Major Index Overhaul to Address Crypto Holdings

Market index provider MSCI finds itself at the center of a significant potential policy shift. Beyond its latest quarterly earnings, the firm is proposing a rule change that could exclude companies with substantial cryptocurrency assets from its flagship global indexes. This development coincides with continued analyst confidence in the company's core business, as evidenced by a recent reiterated rating and a modest price target increase.

MSCI's third-quarter financial results presented a nuanced picture. On a positive note, adjusted earnings per share came in at $4.47, surpassing the consensus estimate of $4.37. However, revenue of $793.4 million fell short of the approximate $809.1 million forecast by analysts. The company continues to demonstrate strong operational efficiency, with an adjusted EBITDA margin of 62.3%. MSCI also maintains an active capital return program, including a $3.0 billion share repurchase authorization and a quarterly dividend payout of $1.80 per share.

Reflecting this mixed backdrop, the stock closed its latest session at €490.50. While this price sits above near-term moving averages, a Relative Strength Index (RSI) reading of 71.1 suggests the shares may be approaching overbought territory in the short term.

Institutional research firm Autonomous Research recently affirmed its "Outperform" rating on MSCI. Simultaneously, it raised its price target to $644 from a previous $642, signaling sustained belief in the company's profitability and its ability to maintain robust benchmark standards.

The Proposed Crypto Exclusion Rule

The most consequential news surrounds a consultation launched by MSCI. The proposal considers removing companies from its Global Investable Market Indexes if digital assets constitute 50% or more of their balance sheet. The stated rationale is to preserve the traditional definition of "equity" within its benchmarks and to distinguish between operating businesses and entities that function primarily as cryptocurrency investment vehicles.

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Should the rule be implemented, the impact on so-called "Bitcoin treasury" companies would be direct and significant. MicroStrategy is frequently cited as a prime example. Analysts estimate that index rebalancing triggered by an exclusion could force passive fund outflows in the billions of dollars, with figures as high as $2.8 billion mentioned for MicroStrategy alone. Given that institutional investors, who hold roughly 90% of freely tradable shares, are the primary users of these indexes, shifts in passive investment flows would be acutely felt by affected firms.

Timeline and Market Implications

The consultation period for this proposed change is set to conclude on December 31, 2025. MSCI has scheduled a final decision for January 15, 2026.

These dates are poised to become critical volatility events for stocks potentially on the exclusion list. The outcome is essentially binary: an affirmative decision would likely trigger immediate rebalancing activity and related selling pressure, while a rejection of the rule would provide temporary relief. For MSCI itself, establishing a clear, formal policy could bolster its long-term reputation for index quality and governance among its institutional client base.

Market participants and investors are advised to monitor these key dates, as the final ruling will have tangible effects on the composition of major index funds and, consequently, on capital flows into individual corporate equities.