Strategy's (MSTR) attempt to join the S&P 500 index was rejected despite meeting technical criteria, indicating growing caution towards companies acting as de facto bitcoin funds.
The decision by the index committee is a setback for corporate crypto treasuries using balance sheets to accumulate bitcoin.
Strategy's inclusion in other indices like Nasdaq 100 and MSCI has allowed bitcoin indirect entry into portfolios, but the S&P 500 decision may limit this trend.
Nasdaq reportedly requires shareholder approval before companies can issue new stock to buy crypto.
Strategy has abandoned its no-dilution pledge, indicating readiness to issue shares at lower multiples to fund bitcoin purchases.
Corporate crypto treasuries face weakening share prices and reduced issuance; equity and debt fundraising volumes declined last quarter.
This decline questions the sustainability of the corporate bitcoin-treasury model, with a shift towards favoring crypto companies with operational businesses over pure bitcoin-holding firms.
