JPMorgan Warns S&P 500 Rejection Deals Major Blow to MicroStrategy’s Crypto Ambitions

Wall Street's cold shoulder just sent shockwaves through crypto-correlated stocks.

The S&P 500's rejection isn't just a paperwork snafu—it's a fundamental challenge to MicroStrategy's entire Bitcoin-heavy thesis. JPMorgan analysts spotlight what institutional investors already suspected: traditional finance still sets the rules.

No index inclusion means constrained institutional capital, reduced liquidity, and tougher borrowing terms. MicroStrategy built its reputation on being the 'corporate Bitcoin play'—now that narrative faces its sternest test yet.

Another case of legacy finance reminding crypto who really holds the keys. Some things never change—even when the asset class does.

Rising Pressure on Corporate Crypto Treasuries

Besides the S&P rejection, Nasdaq has introduced stricter rules. Companies holding large amounts of crypto must now seek shareholder approval before issuing shares to buy more digital assets. 

Strategy had earlier pledged not to issue shares below a 2.5 multiple but abandoned this commitment last month, raising concerns about funding transparency.

Additionally, JPMorgan highlighted growing investor fatigue. Share prices for bitcoin treasury firms have dropped sharply since June. MicroStrategy shares are down 28% from their June 14 peak of $457. 

Meanwhile, Japan’s Metaplanet, often dubbed the “Japanese Strategy,” has seen a 72% plunge from its all-time high. Equity issuance volumes are slowing, while debt issuance continues at higher risk levels, making fundraising more difficult.

Market Reaction and Wider Impact

Analyst Eric Balchunas noted that inclusion in the S&P 500 is ultimately a committee decision rather than a purely rules-based process. On the other hand, Robinhood and a few other companies have made their way into the index, while crypto-focused firms have been left out in the cold. 

Saylor tried to brush off the rejection, mentioning that Strategy didn’t expect to be included in its first eligible quarter. Still, this decision is another setback for Bitcoin treasury firms that are already having a tough time trying to regain bullish momentum after months of falling valuations.

The S&P 500 rejection is a skepticism around Bitcoin-centric business models. Without broader market recognition, crypto treasury firms may face even steeper challenges.

Also Read: