Bitcoin's Biggest Buyer Could Get Kicked Out Of Major Stock Indexes

MSCI’s proposed index rule would favor companies with operating businesses and cash flow over companies that primarily hold assets and use financial engineering. Scott estimated that excluding Strategy could prompt about $2.8 billion in outflows, less than a day’s trading in the stock. Sandy Call argued that exclusion would not stop Strategy or necessarily deter investors seeking Bitcoin exposure, but could weaken the company’s appearance of mainstream acceptance.

Franklin Templeton says its tokenization effort has moved beyond developing technology and secure operations toward putting established products into practical use. Its Benji technology launched in 2021, and Call described the related products as having a five-year track record. Franklin is using Benji as collateral and developing ways to sweep stablecoin balances into tokenized money market funds for yield, including for corporate treasurers. Call said Benji is collateral at three of the four largest derivatives exchanges and available at 90% of leading derivatives trading venues. The app allows subscriptions from $20 and transfers from $1, with cash yield near 4%.

Call distinguished fully cash-backed tokenized bank deposits from stablecoins whose reserves may include investments that must be sold to meet redemptions. Converting stablecoins to cash can add costs and reduce yield, while concerns about reserve liquidity have contributed to depegs. She said tokenized deposits could match stablecoins in utility and take market share; the host noted that stablecoin issuers’ interest income depends on rates. Tokenized stock products, meanwhile, generally offer exposure through derivatives or swaps rather than ownership of shares. Franklin has worked with Ondo and Kraken on tokenized ETFs, but Call described those products as derivatives. Providing transferable tokens with dividends, voting and other shareholder rights remains difficult, especially when ownership can change throughout the day.

Franklin is also converting alternative-fund contracts from paper into smart contracts and reusable templates to automate administration, with liquid alternatives planned before private funds. Call cautioned that tokenizing a private-fund share does not make its underlying asset liquid; a liquid token tied to an illiquid asset could create a mismatch that erodes value. She sees AI and blockchain becoming more connected, with AI potentially optimizing payments and investments in round-the-clock markets and crypto networks supporting businesses that need faster transactions. But broader access to investments does not solve inflation or a lack of disposable income.

Franklin’s crypto team is looking for exposure to value created as more economic activity moves onto crypto rails. Call said investors may need crypto exposure because value created by decentralized networks or protocols requires owning their crypto, unlike company value that can be accessed through stock. Franklin is evaluating about 40 coins using discounted cash flow, revenue and earnings multiples alongside tokenomics and token-pool design. Call favors selective valuation, including network effects and mechanisms such as buybacks, and expects the next major crypto move to be a broad rally across protocols and infrastructure, not only Bitcoin.

The host said Coinbase holds 15% of Bitcoin in custody, correcting a report that put the figure at 5%, and said Coinbase wants work on a quantum-related Bitcoin fix to begin now despite uncertainty about quantum computing’s effect on Bitcoin. Strive plans to raise $500 million to buy Bitcoin through a new preferred share class offering a 15% dividend yield at par; the shares would rank below its existing variable-rate preferred shares. The host raised the possibility that Ledger devices purchased through an approved third party could contain spyware capable of reading screens and stealing keys, and called self-custody’s security situation an “existential crisis.” During a reported liquidation, Bitcoin fell from the mid-$80,000s to the low-$80,000s, and tokenized Sandisk shares with 100x leverage were liquidated more heavily than actual tokens for the first time.

Blur’s monthly NFT trading volume reportedly fell from a peak of $1.43 billion to $7 million before the marketplace shut down. The host said its token had been driven mainly by airdrops and incentives rather than trading activity. Kraken’s owner plans to buy a European bank and offer services including deposits and yield, while Binance.US is seeking $100 million to expand its U.S. business. Kalshi’s CEO said state-led oversight of U.S. prediction markets would force the company to leave, underscoring the conflict between state governments and federal oversight.