MSCI Isn't Wrong to Be Cautious on DATs

MSCI, a major index provider, is considering excluding Digital Asset Treasuries (DATs) from its benchmarks, a move that has alarmed the crypto community. The author, Nic Puckrin, argues that MSCI's caution is warranted because many DATs, which exploded in number after the success of Strategy (MSTR), exhibit significant structural issues and high risk.

Many newer DATs raised funds on unfavorable terms, bought crypto at high prices, and are now facing distress during the recent crypto sell-off, evidenced by forced sales of crypto holdings to fund share buybacks. MSCI's inclusion in its indexes signals assets are well-governed and transparent; excluding them suggests unacceptable risk. While established players like Strategy might survive, the overall sector shows fragility. Therefore, MSCI's cautious stance is seen not as an attack on crypto, but as traditional finance protecting investors by applying stringent standards, which could ultimately strengthen legitimate digital asset treasuries.

(Source：CoinDesk)