MSCI Crypto Treasury Rules Could Trigger $15B Selloff as Aave Advances Institutional DeFi Push

MSCI Proposal Threatens Massive Crypto Outflows

Crypto treasury companies could face forced sales of up to $15 billion in digital assets if the Morgan Stanley Capital International Index (MSCI) proceeds with a proposal to exclude them from its indexes, according to analysis from BitcoinForCorporations, a group campaigning against the measure ^[1].

The organization projected outflows between $10 and $15 billion based on a "verified preliminary list" of 39 companies with $113 billion in total float-adjusted market capitalization ^[1]. JPMorgan's analysis estimated that Michael Saylor's Strategy could see $2.8 billion in outflows if removed from the MSCI, representing 74.5% of the total impacted float-adjusted market cap ^[1].

Analysts calculated potential outflows could total $11.6 billion across all impacted companies ^[1]. Such large-scale selling would add pressure to crypto markets, which have already been trending downward for nearly three months ^[1].

Industry Objects to Balance Sheet Metric

The MSCI announced in October it was consulting with the investment community about whether to exclude crypto treasury companies that have the majority of their balance sheet in crypto ^[1]. MSCI's indexes serve as critical benchmarks that determine which companies passive investment funds must hold, making inclusion decisions highly consequential for companies' access to capital ^[1].

BitcoinForCorporations argued that a balance sheet metric is unfair for judging companies. "A single balance sheet metric cannot reflect whether a company is an operating business. The rule would remove companies even when their customers, revenue, operations, and business model remain unchanged," the group stated ^[1].

The organization urged MSCI to "withdraw the proposal and continue to classify companies based on their actual business model, financial performance, and operational characteristics" ^[1].

Several major industry players have voiced objections. On December 5, Nasdaq-listed Strive urged MSCI to "let the market decide" whether to include Bitcoin-holding companies in passive investments ^[1]. Days later, Strategy stated in a letter that the proposed policy change would bias MSCI against crypto as an asset class, rather than acting as a neutral arbiter ^[1].

MSCI's final conclusions will be announced by January 15, with proposed implementation included in the February 2026 Index Review ^[1].

Aave Targets $1B in Real-World Assets

In a separate development highlighting institutional crypto adoption, decentralized finance platform Aave unveiled an ambitious expansion plan following the closure of a four-year SEC investigation ^[2].

Aave founder Stani Kulechov announced a three-pillar strategy comprising Aave V4, Horizon, and Aave App ^[2]. The V4 upgrade will enhance the platform's borrowing and lending pools, user interface, and liquidation parameters through a Hub and Spoke model featuring a unified crosschain liquidity pool ^[2].

Horizon, Aave's decentralized real-world asset (RWA) market, aims to onboard "many top financial institutions" as part of efforts to become a major RWA player ^[2]. "Horizon currently sits at $550M net deposits," Kulechov said. "In 2026 we'll look to quickly scale this to $1 billion and beyond by expanding our work with leading institutional partners like Circle, Ripple, Franklin Templeton, VanEck, and others to bring major global asset classes to Aave" ^[2].

SEC Investigation Concluded

Kulechov posted on December 16 an August 12 letter from the SEC stating it did "not intend to recommend an enforcement action" against Aave ^[2]. The letter's text suggested the protocol had faced a potential enforcement action in a probe that began four years ago ^[2].

"We're glad to put this behind us as we enter a new era where developers can truly build the future of finance," Kulechov said ^[2]. There are no publicly available records on the SEC's website showing the agency issued a Wells notice to Aave, which would have signaled intent to initiate potential enforcement action ^[2].