Inside the split around Bitcoin vaults: how index changes reshape institutional flows

When MSCI proposed a new methodology in October for companies whose digital assets exceed half of their assets, it sparked a complex debate that goes beyond simple index administration. The question appears technical — whether Bitcoin treasuries should be excluded from global investment indices — but its implications will transform how capital flows into Bitcoin and related assets.

By January 2026, the market for Bitcoin treasuries will reach a critical mass. Over 200 U.S. public companies have accumulated around $115 billion in cryptocurrencies, forming a total market capitalization of about $150 billion — a jump from $40 billion a year earlier. This has become the third channel of institutional capital into Bitcoin alongside spot ETFs (over $100 billion in assets) and mining operations. For funds and portfolios constrained by mandates that prohibit direct cryptocurrency ownership, treasury stocks have been a legal workaround: gaining Bitcoin exposure without breaching compliance.

Why MSCI is changing the rules

MSCI’s proposed Global Filter is simple: exclude any company where digital assets make up more than 50% of the portfolio. The question sent out by December 31 was straightforward — should companies that self-identify as Bitcoin treasuries or raise capital solely for its accumulation be considered passive funds disguised as corporations?

The core of the conflict lies in the definition. If a treasury is an operating company with a real business, it remains in stocks. If it’s just a passive vessel for Bitcoin holdings, it is treated similarly to investment funds already excluded from equity benchmarks. The way some companies position themselves — as a Strategy describing itself as “a structured financial company backed by Bitcoin” — demonstrates the blurring of this line.

JPMorgan models a wave of sales

JPMorgan published a November analysis that shocked the market. If only MSCI reclassifies Strategy, about $2.8 billion of passive assets will be forced to sell. If Russell and other providers follow suit, the mechanical outflow could reach $8 to $9 billion. This was the second index shock to Strategy after its exclusion from the S&P 500 and caused market outrage.

The bank’s criticism became heated. Public calls for boycotting JPMorgan and shorting its shares fueled tensions, as the analytical note turned into a self-fulfilling prophecy — the very act of modeling the impact made it more likely.

Deeper dilemma: proxy stocks vs. pure exposure

The outrage reveals a fundamental tension in how Bitcoin enters institutional portfolios. Treasuries focused on different tokens have shown vulnerability. Those focused on Solana saw their total net asset value drop from $3.5 billion to $2.1 billion — a 40% decline — creating a risk of forced liquidation from $4.3 billion to $6.4 billion even with partial position closures.

Meanwhile, spot Bitcoin ETFs crossed the $100 billion mark under management in less than a year. BlackRock’s IBIT alone held over $100 billion in BTC and about 6.8% of circulating supply by the end of 2025. These instruments offered advantages that treasuries did not: cleaner exposure without balance sheet leverage or NAV discounts.

Where billions are flowing

MSCI’s consultation accelerated an already ongoing shift. Institutional capital that previously viewed treasury stocks as a channel for BTC exposure is now moving into regulated ETFs. For Bitcoin itself, the distribution may be neutral or positive if inflows into ETFs offset outflows from treasuries; for stocks, this definitely negatively impacts liquidity.

Smaller treasuries with weaker balances may not have the luxury of Strategy, which signals it will not sell Bitcoin. They may cut future purchases or liquidate assets to strengthen their balance sheets. According to DLA Piper in October, treasury companies invested $42.7 billion in cryptocurrencies during 2025, with $22.6 billion in Q3 alone.

Structural change in the system

Russell and FTSE Russell have not yet launched official consultations on Bitcoin treasuries, but JPMorgan’s scenario suggests other providers will gradually adopt MSCI’s approach. The game here is not just about treasuries or ETFs, but where ownership of Bitcoin will be concentrated.

If MSCI’s rule drives outflows into specialized Bitcoin products, ownership concentration will intensify around ETFs and a few large corporate players. If the treasury ecosystem maintains diversification, ownership will remain more dispersed. MSCI’s decision on January 15, with implementation in February 2026, will transform not only index weights but also the very structure of Bitcoin concentration.