MicroStrategy Misses S&P 500 Inclusion as Investors Question Bitcoin Treasury Risks

When the S&P 500 index committee revealed its latest rebalancing in September, one name was conspicuously absent: Strategy, the company formerly known as MicroStrategy. Despite meeting key criteria such as profitability, liquidity, and market capitalization, the software firm turned bitcoin-treasury powerhouse was left out of America’s most closely tracked equity benchmark.

Instead, Robinhood and AppLovin were chosen for inclusion. That contrast stung. Robinhood, which offers crypto trading alongside equities, was welcomed. At the same time, Strategy’s identity as a de facto bitcoin proxy seemed to work against it. JPMorgan analysts called the exclusion a cautionary signal for companies experimenting with corporate balance sheets dominated by bitcoin.

Michael Saylor’s Bitcoin Strategy Moves Full Speed Ahead

The decision hasn’t slowed down Michael Saylor, the company’s co-founder and executive chairman. After rebranding from MicroStrategy to Strategy this summer, the firm doubled down on its identity as a bitcoin treasury company. The new name reflects its transformation from an enterprise software provider into one of the world’s largest corporate holders of digital assets.

Just days after the index snub, Strategy revealed it had purchased an additional 1,955 BTC, spending about $217 million. That buy pushed its total holdings well above 200,000 BTC, making the company’s stock, ticker MSTR, one of the purest public market bets on bitcoin’s long-term trajectory.

For Saylor, the path is clear: Bitcoin should serve as a corporate reserve asset, replacing cash and bonds on company balance sheets. Though crypto enthusiasts clearly embraced this vision, it is proving a harder sell to the arbiters of Wall Street benchmarks.

>>> Read more: MicroStrategy Lawsuit Mounts as Saylor Teases More Bitcoin

Why the S&P 500 Said No To MicroStrategy

On paper, Strategy ticked the right boxes. Its market value now exceeds $20 billion, it has multiple quarters of profitability, and MSTR shares are highly liquid. But the S&P 500 index committee retains broad discretion in its selections.

Analysts suggest the committee was reluctant to admit Strategy. Its business model increasingly resembles a single-asset fund tied to bitcoin. Robinhood’s S&P 500 inclusion highlighted that financial firms with crypto exposure are acceptable. Nevertheless, Strategy’s heavy reliance on one volatile asset proved a sticking point.

This committee’s discretion highlights a broader issue. Bitcoin-first corporates may face hurdles in convincing traditional finance that they offer diversification rather than concentration risk.

MSTR Stock Reaction and Investor Concerns

The immediate investors’ reaction was swift. Strategy shares slipped following the announcement, narrowing the premium that MSTR often trades at relative to the underlying value of its bitcoin holdings.

Some investors worry the exclusion could weigh on Strategy’s valuation in the long run. Membership in the S&P 500 often brings passive inflows from index funds, steadying liquidity and boosting credibility. Without those benefits, Strategy may face a higher cost of capital compared to peers inside the benchmark.

For retail and institutional shareholders alike, the S&P decision forces a reassessment. Is MSTR a technology stock with bitcoin exposure, or simply a leveraged bitcoin play with an equity wrapper? That distinction matters for risk management, especially as market volatility continues.

JPMorgan’s Warning on Corporate Bitcoin Treasuries

JPMorgan’s research desk was blunt in its assessment. The bank argued that other companies should read the S&P 500 snub as a warning when contemplating large-scale bitcoin treasuries mirroring MicroStrategy.

According to the note, corporates that align too closely with digital assets could find themselves excluded from important benchmarks. That exclusion reduces potential passive investment flows. It also sends a negative signal to institutional investors concerned about volatility and regulation.

In essence, JPMorgan suggested that the dream of turning corporate treasuries into bitcoin reserves may clash with the conservative risk profile that index providers want to maintain.

What’s Next for Strategy and Its Shareholders

Looking ahead, Strategy still has theoretical pathways to future S&P 500 inclusion. If it can stabilize performance, diversify revenue streams, or reduce the perception of being a single-asset proxy, the committee may reconsider.

But risks remain significant. Another cycle of bitcoin volatility could pressure MSTR’s share price. Prolonged exclusion from the index would also cap potential passive inflows, a headwind for valuation.

For shareholders, the truth is unchanged. Owning MSTR stock is a bet on bitcoin’s long-term rise, not a guaranteed path to index inclusion. The stock offers leverage to crypto’s upside but also amplifies its downside.

Conclusion — A Bold Strategy, but an Uncertain Payoff

Strategy’s exclusion from the S&P 500 underscores the uneasy relationship between bitcoin maximalism and index orthodoxy. Michael Saylor’s conviction remains unwavering, and the company continues to accumulate BTC at a record pace. Yet Wall Street’s most influential benchmark has sent a clear signal: conviction alone is not enough to secure a place at the table.

>>> Read more: Indirect Crypto Exposure: How Index Funds Tie You to Bitcoin

For now, investors face a choice. They can embrace MSTR as a unique, equity-based exposure to bitcoin, or they can heed the caution that comes from being left outside the S&P 500. Either way, Strategy’s bold approach ensures it will remain a lightning rod in debates about how corporate America should handle digital assets.