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Analysis: S&P 500 Rejection of Strategy is a Warning Sign for Corporate Bitcoin Holdings
BlockBeats News, September 11th, despite MicroStrategy (MSTR) meeting the technical inclusion criteria for the S&P 500 index, its application to join the index was rejected. JPMorgan believes this reflects a growing cautious stance towards companies that effectively act as Bitcoin funds. An analyst team led by Nikolaos Panigirtzoglou stated that this discretionary decision by the index committee is not only a setback for MicroStrategy but also has implications for an increasing number of cryptocurrency holders who are emulating its strategy of accumulating Bitcoin on their balance sheets.
The report points out that MicroStrategy has been included in other major benchmark indices such as the Nasdaq 100 and MSCI indices, quietly paving the way for Bitcoin's entry into retail and institutional portfolios. However, the Wall Street bank warned that the S&P 500's decision may signal a limit to this trend and could prompt other index providers to reconsider whether to continue including companies holding large amounts of Bitcoin.
The report also mentioned that Nasdaq has reportedly begun to require companies to obtain shareholder approval before using new stock issuance to purchase cryptocurrency, adding further pressure. MicroStrategy recently abandoned its commitment to a non-dilutive equity offering, indicating a willingness to issue shares at a lower multiple to continue funding Bitcoin purchases. Meanwhile, the stock performance of corporate cryptocurrency holders has been weak, and the pace of issuance is slowing down.
JPMorgan noted that both equity and debt financing amounts decreased last quarter, indicating waning investor interest. This fatigue has raised doubts about the sustainability of the corporate Bitcoin holding model. The report added that while some companies are turning to more complex financing methods, such as Bitcoin-backed loans or token-linked convertible bonds, the continuously rising risk premium may drive investors and index providers to favor cryptocurrency companies with operating businesses (such as exchanges and miners) over pure-play Bitcoin holding entities.
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