Strategy’s S&P 500 Snub Raises Red Flags for Corporate Crypto Treasuries, Says JPMorgan

JPMorgan analysts have warned that the S&P 500 Index Committee’s recent decision to exclude Strategy (formerly MicroStrategy) from the index, despite the company meeting technical eligibility requirements, represents a broader setback for corporate crypto treasuries.

In a report published Wednesday, analysts led by Nikolaos Panigirtzoglou said the move reflects growing hesitation toward including firms whose business models revolve primarily around holding Bitcoin. The decision, made at the committee’s discretion, is seen as a deliberate signal against admitting companies that function more like investment vehicles than traditional operating businesses. The report stated:

“This is signaling that the committee … is concerned about including in the S&P 500 index companies such as MicroStrategy that are effectively bitcoin funds.” 

Bitcoin exposure via benchmarks may be hitting a wall

Strategy has already secured inclusion in several major indices, including the Nasdaq 100, MSCI USA, MSCI World, and Russell 2000, which has allowed Bitcoin exposure to enter both institutional and retail portfolios indirectly. However, the S&P 500 rejection may indicate that this indirect channel is reaching its limit.

“Index membership has been a key driver for Strategy’s stock”, JPMorgan noted, suggesting that the snub could have broader implications for firms seeking similar exposure.

The decision coincides with increased scrutiny from other market participants. The Nasdaq, for example, has reportedly begun requiring companies with significant crypto holdings to obtain shareholder approval before issuing new shares to fund further Bitcoin purchases. Strategy, which had previously pledged not to issue shares below a 2.5x multiple, quietly dropped that commitment last month.

A turning point for the crypto treasury model?

JPMorgan analysts argue that the S&P 500 decision could influence other index providers to reconsider their stance on companies like Strategy. The move also raises fundamental questions about the sustainability of corporate Bitcoin accumulation as a business model.

Crypto treasury firms are already under pressure from weakening share prices and declining equity issuance volumes. While debt issuance continues, it does so with increasing risk premiums. Some companies have experimented with complex financing tools such as Bitcoin-backed loans and token-linked convertibles, but investor appetite appears to be waning.

According to BitcoinTreasuries.net, public companies currently hold over 1 million BTC, with Strategy alone accounting for 638,460 BTC, far outpacing other corporate Bitcoin holders like Tesla, Coinbase, and Marathon Digital. Still, JPMorgan warns that capital may increasingly shift toward crypto firms with actual operating businesses, such as exchanges and miners, rather than those primarily leveraging their balance sheets to hold Bitcoin.

The S&P 500’s decision not to include Strategy could be the clearest indication yet that Wall Street is drawing a line on how far it will accommodate Bitcoin-heavy corporate strategies within traditional equity benchmarks.