JPMorgan says S&P Dow Jones Indices’ decision not to add Strategy (formerly MicroStrategy) to the S&P 500, despite it meeting size and eligibility requirements, is a significant signal about the risks of corporate crypto-treasury models. While not formally an investment fund, most of the company’s valuation comes from bitcoin holdings rather than its core IT business, effectively making it a proxy bitcoin fund. JPM strategists led by Nikolaos Panigirtzoglou argue the rejection shows the index committee’s reluctance to backdoor bitcoin exposure into mainstream portfolios.
The move could have broader consequences: other index providers may rethink their inclusion of crypto-heavy corporates, and the Nasdaq has already begun requiring shareholder approval for companies issuing shares to buy crypto.
JPMorgan adds that investor appetite may shift toward crypto firms with real operating businesses, such as exchanges and miners, instead of companies holding bitcoin on their balance sheets. The volatility is clear — firms like EightCo, CaliberCos, and Mogu have seen sharp stock moves on crypto purchases, but many have since lost value. Strategy’s premium over its underlying bitcoin has also narrowed sharply.
