The largest corporate holder of bitcoins, Strategy, was not included in the S&P 500 index, despite meeting most criteria such as market capitalization, liquidity, and listing on the Nasdaq exchange.
The updated list of companies included in and excluded from the S&P Dow Jones Indices was published on Friday, September 5, which led to a 2.9% drop in Strategy (MSTR) shares — their price fell below $330.
The exact reasons and details of such a decision are not disclosed, as they are the responsibility of the so-called 'secret committee' of S&P Dow Jones Indices. The committee is responsible for the rebalancing of the S&P 500 index and acts based on its own criteria.
Bloomberg Intelligence analyst Eric Balchunas stated that, in his opinion, several factors may have influenced the decision of the 'secret committee.' First and foremost, the high volatility of Strategy's stocks, which is several times higher than that of companies included in the S&P 500 index, as well as the risk of business sustainability due to the concentration on accumulating bitcoins. In addition, regulatory and institutional skepticism from committee members regarding the role of bitcoin in corporate balance sheets may have also played a role.
If Strategy's application had been approved, Balchunas suggested, it could have led to significant inflows of investor funds sufficient to acquire about 250,000 BTC.
Co-founder of Strategy Michael Saylor reacted to the committee's decision by publishing a tweet with an infographic showing that the inclusion of the company in the S&P 500 is merely a formal recognition. Due to its business model based on accumulating bitcoins, the company's market indicators far exceed the growth dynamics of the index, Saylor stated.
At the same time, another major crypto platform, Robinhood, which provides retail investors with the opportunity to trade stocks, digital assets, and their derivatives, was included in the S&P 500 index.
Earlier, Michael Saylor urged investors to use the moment of the drop in the market price of Bitcoin to enter the market and form long-term investment strategies.
