• Fold Holdings, a Bitcoin financial services firm, announced its inclusion in the Russell 2000 on December 22.
• MSCI proposes excluding companies with over 50% digital asset holdings, potentially triggering $8.8 billion in industry outflows.
• MSCI’s final decision is expected January 15; analysts warn other equity index providers will likely follow suit.

Bitcoin financial services company Fold Holdings will be added to the Russell 2000, a primary US small-cap benchmark index.

The announcement comes as MSCI considers excluding crypto-holding companies from its indexes, drawing significant industry attention.

Fold Holdings Announces Russell 2000 Inclusion

Fold Holdings (NASDAQ: FLD) officially announced its inclusion in the Russell 2000 on December 22. The company describes itself as the first publicly traded Bitcoin financial services firm, with over 1,500 BTC in its treasury. Its product lineup includes the Fold App, Fold Bitcoin Gift Card, Fold Debit Card, and the upcoming Fold Bitcoin Rewards Credit Card.

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“Fold’s inclusion in the Russell 2000 Index is a significant milestone that further validates our position as a successful public company,” said Will Reeves, Chairman and CEO. “We expect index inclusion to broaden market awareness and increase visibility among institutional and retail investors.” Reeves added that the company is focused on “disciplined execution, expanding distribution, and creating sustained value for shareholders.”

Goldman Sachs analyst Ben Snider forecast on Monday that the Russell 2000 could see upward momentum in early 2026. However, he expects roughly 10% annual returns, slightly trailing the S&P 500’s projected 12%. The analyst noted that the consensus EPS growth estimate of 61% for the Russell 2000 appears “far too optimistic,” while adding that high return dispersion within the index could create alpha generation opportunities for active investors.

What Is the Russell 2000?

The Russell 2000 comprises approximately 2,000 US small-cap stocks, representing about 5-7% of total US public equity market capitalization. Unlike the large-cap-focused S&P 500, it tracks smaller companies with higher growth potential and serves as a benchmark for mutual funds and ETFs that measure small-cap investment performance.

Fold Holdings is not the first crypto-related company to join the Russell 2000. Bitcoin mining firms, including Marathon Digital Holdings (MARA), Riot Blockchain, Cipher Mining, and Bit Digital, are already included in the index. In 2023, these mining companies ranked among the top performers within the Russell 2000.

However, Fold Holdings differs from existing constituents in that it provides consumer-facing fintech services rather than mining operations.

MSCI Considers Excluding Crypto Companies

Another reason Fold Holdings’ inclusion is drawing attention is MSCI’s ongoing deliberations. In October, the major global index provider proposed removing companies whose digital asset holdings exceed 50% of total assets from its global benchmarks, arguing that such companies are more like investment funds than operational businesses.

Strategy (formerly MicroStrategy), led by Michael Saylor, is among the most prominent companies at risk. According to JPMorgan analysis, Strategy could face $2.8 billion in outflows from MSCI exclusion alone. The bleeding could reach $8.8 billion if other indexes follow suit. Saylor and Strategy CEO Phong Le warned in a public letter that exclusion would “deprive these companies of about $15 trillion in passive investments” and “chill” the industry.

MSCI’s consultation period ends January 15, when a final decision will be announced. Analysts warn that MSCI’s ruling could set a precedent for the broader index industry. This is because other equity index providers are likely to adopt similar policies. The stakes are high for digital asset treasury firms, many of which fund token purchases by selling stock and rely on passive fund flows. MSCI’s preliminary list identifies 38 companies with a combined market capitalization of $46.7 billion as at risk of exclusion.

The digital asset treasury sector has grown rapidly, with combined market capitalization exceeding $150 billion as of September—more than triple the figure from a year earlier, according to industry estimates.

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