S&P 500’s rejection of the company formerly called MicroStrategy may stop the crypto-acquisition frenzy: JPMorgan

Core Viewpoint - The S&P 500's exclusion of MicroStrategy, now known as Strategy MSTR, raises concerns about the viability of corporate treasury investments in cryptocurrency [1][2][4]. Group 1: S&P 500 Index Decision - S&P Dow Jones Indices decided not to include Strategy MSTR in the S&P 500 index despite it meeting size and other key requirements, indicating a significant stance on corporate crypto investments [2][4]. - The exclusion suggests that the committee is wary of including companies that primarily function as bitcoin funds, which could impact other corporate crypto treasuries attempting to follow MicroStrategy's model [4][5]. Group 2: Implications for Corporate Crypto Treasuries - The rejection of Strategy MSTR signals a limitation on how much cryptocurrency can be integrated into investor portfolios through traditional equity indices [5]. - There is a potential risk that other index providers may reconsider their inclusion of corporate crypto treasuries in their indices following S&P's decision [5][6]. Group 3: Market Trends and Future Considerations - The Nasdaq has begun requiring companies with crypto assets to obtain shareholder approval before issuing new shares for crypto purchases, reflecting growing scrutiny on corporate treasury practices [6]. - As concerns about the sustainability of corporate treasuries increase, there may be a shift in investor and index provider preferences towards crypto companies with operational businesses, such as exchanges or miners [6].