JPMorgan analysts said the S&P 500 committee’s decision to exclude Strategy from the index is a setback for crypto treasuries and may signal that the corporate Bitcoin reserve trend has peaked.
JPMorgan says Strategy’s rejection from S&P is a blow to crypto treasuries
JPMorgan analysts stated that the S&P 500 committee’s decision to reject Strategy’s (formerly MicroStrategy) inclusion in the index marks a major setback for crypto treasuries, according to a note to investors on Wednesday.
The analysts, led by Nikolaos Panigirtzoglou, said the move is not only a blow to Strategy but to the growing number of companies following its playbook in recent months.
Strategy’s rejection from the index comes despite the firm meeting eligibility requirements, pointing to caution over adding companies that have turned their balance sheets into large bitcoin holdings, according to the analysts.
“This is signaling that the committee, which can apply discretion in its index inclusion decisions, is concerned about including in the S&P 500 index companies such as MicroStrategy that are effectively bitcoin funds,” JPMorgan analysts wrote in the note.
The S&P 500, which tracks the performance of the top 500 companies in the US, will include Robinhood Markets (HOOD), AppLovin (APP) and Emcor Group (EME) starting in September.
These firms will replace MarketAxess Holdings (MKTX), Caesars Entertainment (CZR) and Enphase Energy (ENPH) on the index.
JPMorgan analysts added that the rejection comes as corporate crypto treasuries struggle with overcrowding interests and waning investor sentiment, reflected in slower issuance and declining share prices.
They noted that Strategy’s shares have been largely driven by index membership, which has enabled Bitcoin exposure to flow into benchmarks such as the Nasdaq 100, MSCI USA, MSCI World, and the Russell 2000.
JPMorgan also cautioned that the S&P’s decision could signal a peak for the trend and potentially lead other index providers to reconsider the inclusion of Bitcoin-heavy firms.
The recent comments follow a series of mixed community reactions about the S&P 500 committee’s decision to exclude Strategy. It also comes as more institutions have tightened their oversight around digital asset treasury companies in recent weeks.
Nasdaq reportedly strengthened its oversight on crypto treasury companies last week, requiring some firms to secure shareholder approval before issuing new equity to fund their crypto reserves.
Strategy’s stock dropped 0.4% on Thursday, stretching its decline to 2.6% over the past five days.
