JPMorgan Sees S&P 500 Rejection as Setback for Crypto Treasury Firms
JPMorgan analysts said the S&P 500 committee’s decision to exclude Strategy (formerly MicroStrategy) is a major setback for crypto treasury firms. The move shows caution about adding companies with large Bitcoin holdings to the index.
Despite meeting eligibility rules, Strategy was rejected. JPMorgan believes this signals concerns about companies acting like Bitcoin funds within the S&P 500.
Impact on Crypto Treasury Companies and Indexes
The analysts, led by Nikolaos Panigirtzoglou, said many companies have copied Strategy’s approach. This has caused overcrowding in the crypto treasury space. Investor interest is also slowing, shown by fewer new issues and falling share prices.
Strategy’s stock has benefited from being included in other indexes like the Nasdaq 100 and MSCI USA. These indexes helped bring Bitcoin exposure to more investors. However, JPMorgan warns the S&P 500 decision may mark a peak for this trend.
The S&P 500 will add Robinhood Markets, AppLovin, and Emcor Group in September. They will replace MarketAxess Holdings, Caesars Entertainment, and Enphase Energy.
Industry Response and Market Reaction
The decision has sparked mixed reactions in the crypto community. Some institutions have increased oversight of crypto treasury firms. For example, Nasdaq now requires shareholder approval before some companies can issue new shares to fund crypto reserves.
Strategy’s stock fell 0.4% on Thursday and has dropped 2.6% over the past five days.
