MicroStrategy’s bid to join the S&P 500 was turned down this week despite meeting the technical eligibility rules — a move JPMorgan says could be a warning sign for other firms using their balance sheets as de facto corporate bitcoin treasuries.
The rejection, highlighted in a JPMorgan note led by Nikolaos Panigirtzoglou, suggests index committees are growing cautious about companies whose primary asset strategy centers on holding large amounts of bitcoin rather than operating traditional businesses. That trend has quietly injected bitcoin exposure into retail and institutional portfolios through existing index inclusions and benchmark tracking.
JPMorgan warns the S&P decision may mark a turning point. Other index providers could reassess whether bitcoin-heavy companies belong in mainstream benchmarks, reducing an important channel that has broadened crypto access for investors. The bank also points to steps by Nasdaq — reportedly asking for shareholder approval before firms issue new stock specifically to fund crypto purchases — as further evidence of rising scrutiny.
MicroStrategy itself recently abandoned a strict no-dilution pledge and has continued issuing shares to buy bitcoin, but weakening share prices and slower equity and debt raises suggest investor appetite is softening. Companies have started exploring more complex financing options, from bitcoin-backed loans to token-linked convertibles, but those approaches bring higher costs and added complexity.
Why this matters: a higher risk premium and tighter index gatekeeping could push investors and benchmarks to favor crypto firms with clear operating revenues — like exchanges and miners — over companies that mainly hold bitcoin on their balance sheets.
Source: CoinDesk. Read the original coverage for full details.