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MSCI Warns of ‘Creeping’ Crypto Exposure in Equity Markets

Fifty-two companies with crypto exposure combine for a total market capitalization of $7.1 trillion.

Updated May 11, 2023, 4:07 p.m. Published Oct 15, 2021, 8:53 a.m.
Financial data graph at stock exchange via Shutterstock
Financial data graph at stock exchange via Shutterstock

MSCI warned of “creeping” exposure to cryptocurrency in equity markets by 52 companies with some degree of crypto exposure.

  • The companies covered by the index provider’s research have a combined market capitalization of $7.1 trillion, Bloomberg reported Thursday.
  • The roster includes firms directly involving in the buying and selling of crypto, such as exchange Coinbase, and firms with an allocation of cryptocurrency on their balance sheets, such as business-intelligence software firm MicroStrategy.
  • While those two are among the most obvious examples of crypto exposure, MSCI highlighted in a blog post Wednesday that equity investors may be faced with “creeping” cryptocurrency exposure.
  • “This can occur when newly listed cryptocurrency companies get added to the indexes that guide their investments, or when companies in which they are already invested, directly or through indexes, announce strategies that include bitcoin or other cryptocurrencies.”
  • In particular, the governance of cryptocurrencies may present new challenges to companies and investors, given their decentralized nature.
  • “At a minimum, investors may benefit from understanding how managers and directors of cryptocurrency-exposed companies are monitoring developments in these informal governance frameworks. For companies with more significant exposure, investor interests may be better served by being more actively involved,” MSCI said.

Read more: Crypto-Focused Equities ETF Could Begin Trading in Australia in Coming Weeks

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