Why Wall Street is blocking Strategy’s S&P 500 entry — even with its $56B Bitcoin empire

Strategy Inc. (formerly MicroStrategy) has amassed a $56 billion Bitcoin reserve, funding this aggressive accumulation through $21 billion in securities offerings, leading to significant shareholder dilution. This strategy has transformed the company into a near-perfect proxy for Bitcoin's price movements, causing its stock to drop 68% from its highs as institutions reduced exposure due to discomfort with the financing model and volatility.

While Strategy has diversified its custody by moving BTC to Fidelity Digital Assets, which satisfies lenders, this shift reduces the on-chain transparency retail traders once relied upon. Management introduced a novel "Bitcoin (BTC) Rating" metric to reassure creditors by showing substantial asset coverage over debt, even in adverse price scenarios. However, this metric does not address the dilution or earnings volatility that shareholders face.

The primary barrier to S&P 500 inclusion, despite meeting market cap and liquidity thresholds, is the index's requirement for four consecutive quarters of positive earnings. Because Strategy's profits are mechanically tied to Bitcoin's price, its earnings are too volatile under S&P's accounting framework, effectively barring it from the index and eliminating a source of passive demand.

(Source：CryptoSlate)