Strategy (Mstr) Bid to participate in the S&P 500 index was rejected despite having met technical criteria for eligibility, in what JPMorgan (JPM) calls a sign of growing caution to companies that act as de facto bitcoin Funds.
The index committee’s discretion is a setback not only for strategy, but for the growing number of company crypto chamber that emulates its strategy of using balance to accumulate Bitcoin, analysts wrote by Nikolao’s Panigirtzoglou wrote.
The strategy’s recording in other major benchmarks, from Nasdaq 100 to MSCI indexes, has quietly given Bitcoin a back door in retail and institutional portfolios, the analysts wrote in the Wednesday report.
Wall Street Bank warned that the S&P 500 decision could mark the limit of this trend, and may cause other index providers to consider existing inclusions of Bitcoin-heavy companies.
Adding to the pressure has reportedly begun to claim shareholder approval before companies can issue new stock to buy crypto, the report says.
The strategy itself recently gave up its no-divolution mortgage and signaled a willingness to issue shares on lower multiples to continue to finance Bitcoin purchases.
The news comes as Corporate Crypto Treasuries faces the weakening of stock prices and braking the issue. JPMorgan notes that both equity and debt collection volumes fell last quarter, suggesting the investor appetite is declining.
This fatigue raises questions about the sustainability of the company Bitcoin-Beasury model. While some companies have approached more complex funding. From Bitcoin-backed loans to token-connected convertibles, the rising risk premium could push investors and index providers to favor crypto companies with operating companies, such as exchanges and miners, over pure Bitcoin holding vehicles, the report added.
Read more: Michael Saylor’s strategy snubbed by the S&P 500 in the middle of Robinhood’s Surprise Inclusion
