Bitcoin News Update: S&P 500 Maintains Its Criteria, Leaves Out Bitcoin-Focused MSTR

MSTR Remains Absent from S&P 500 Despite Market Cap

The most recent quarterly update to the S&P 500, announced on November 24, once again left out Michael Saylor’s company, MicroStrategy (MSTR). This decision reinforces the index’s established policy of favoring companies with substantial operational activity over those whose revenues are mainly tied to asset holdings. Even though MSTR’s market value ranks it among the top 250 publicly traded U.S. firms, its transformation from a software business to a company deeply invested in Bitcoin has kept it off the S&P 500 list.

The committee responsible for the S&P 500 consistently prioritizes companies with robust, tangible business operations. MSTR, which now focuses primarily on holding digital assets, does not fit these requirements, as its business model is centered on Bitcoin accumulation rather than traditional operations.

Industry Standards and Index Criteria

The exclusion of MSTR is consistent with broader industry practices. The S&P 500 generally avoids including companies that act as investment vehicles or whose main source of income comes from asset appreciation instead of selling products or providing services. The index committee uses both quantitative data and qualitative assessments, emphasizing long-term business viability and balanced sector representation. MSTR’s shift toward amassing Bitcoin does not align with these standards.

Potential Removal from MSCI USA Benchmark

Adding to its challenges, MSTR may also be dropped from the MSCI USA index. In October, JPMorgan highlighted that MSCI is reconsidering how to classify companies with large cryptocurrency holdings. The proposal suggests excluding firms where digital assets make up more than half of total assets, aiming to prevent sector imbalances. This approach is similar to S&P’s, as both indices seek to represent companies whose value is rooted in operational performance, not speculative asset exposure.

Michael Saylor’s Defense and Financial Realities

Michael Saylor has strongly argued that MSTR is “not a fund, not a trust, and not a holding company.” However, this defense underscores the main issue: MSTR’s financial profile closely resembles that of an investment fund. Its revenue from software is minimal compared to its Bitcoin assets, and the company often reports net losses, which is a stark contrast to the steady profits seen among typical S&P 500 members.

Market analysts point out that most companies in the S&P 500 generate tens of billions in annual sales and maintain consistent profitability—benchmarks that MSTR currently does not meet.

Market Dynamics and Index Stability

Current market conditions further complicate MSTR’s case. The S&P 500’s price-to-earnings (PE) ratio is now 28.36, a figure considered high by historical standards. While this reflects investor confidence in future earnings, it also highlights the index’s commitment to companies with traditional business models. Including MSTR would disrupt sector balance and introduce volatility linked to Bitcoin’s price fluctuations, something index managers aim to avoid.

Conclusion: Operational Fundamentals Take Priority

At present, MSTR’s exclusion from both the S&P 500 and the MSCI USA index seems certain. Both indices emphasize operational strength and sector stability, leaving little room for companies whose value is largely speculative. While Saylor’s ambition to reshape corporate treasuries with Bitcoin is bold, it remains incompatible with the conservative criteria of major market indices, which continue to prioritize genuine economic activity over digital asset holdings.