Strategy’s Exclusion From The S&P 500 in September 2025 Has Several Implications

MicroStrategy (MSTR), now operating as Strategy, was not included in the S&P 500 during the September 2025 rebalancing, despite meeting several eligibility criteria.

The S&P 500 requires companies to have a U.S. listing, a market capitalization above $8.2 billion, high liquidity, at least 50% public float, and positive earnings for the most recent quarter and the trailing four quarters.

MicroStrategy met these thresholds, with a market cap of approximately $95.95 billion and strong Q2 2025 earnings, reporting $10 billion in net income and $14 billion in operating income, largely due to new fair-value accounting standards for its Bitcoin holdings.

However, the S&P Dow Jones Indices committee, which has discretionary power, excluded MicroStrategy in favor of other companies like Robinhood, AppLovin Corp., and Emcor Group Inc.

The primary reason for this exclusion appears to be MicroStrategy’s inconsistent earnings history, driven by the volatility of its Bitcoin holdings, which constitute 636,505 BTC valued at around $70 billion.

The committee prioritizes financial stability and diversified business models, and MicroStrategy’s heavy reliance on Bitcoin’s price fluctuations likely raised concerns about its long-term stability. Analyst Vincent Van Code noted that the company’s financials swing significantly due to unrealized gains and losses on Bitcoin, making it less aligned with the typical S&P 500 candidate profile.

This exclusion disappointed some in the crypto community, as inclusion could have driven significant passive investment inflows, estimated at $10–16 billion, boosting MicroStrategy’s stock and increasing Bitcoin’s mainstream exposure.

While other crypto-related firms like Coinbase and Block Inc. have been added to the S&P 500, MicroStrategy’s unique structure as a Bitcoin proxy may continue to pose challenges unless it demonstrates more consistent profitability or diversifies its business model.

Missing the S&P 500 means MicroStrategy (Strategy) won’t benefit from automatic buying by index funds and ETFs tracking the S&P 500, which could have driven $10–16 billion in inflows. This may limit short-term stock price growth and increase volatility, as the stock remains tied to Bitcoin’s price movements without the stabilizing effect of index inclusion.

As a major Bitcoin holder (636,505 BTC, ~$70 billion), MicroStrategy’s exclusion reduces potential mainstream validation for Bitcoin. Inclusion could have signaled broader institutional acceptance, potentially boosting Bitcoin’s price and adoption. Instead, the crypto market may see tempered enthusiasm.

The decision highlights concerns about MicroStrategy’s financial stability due to its Bitcoin-heavy balance sheet. The S&P committee’s preference for companies with diversified revenue streams may lead investors to view MicroStrategy as riskier, potentially dampening institutional interest.

MicroStrategy may need to diversify its business model or demonstrate consistent profitability beyond Bitcoin gains to improve future S&P 500 eligibility. This could push the company to expand its software operations or adjust its Bitcoin acquisition strategy.

The exclusion underscores the S&P 500’s cautious stance on crypto-focused companies, despite inclusions like Coinbase and Block. It suggests that firms with significant crypto exposure face higher scrutiny, potentially slowing the integration of crypto-related businesses into mainstream indices.

Retail and crypto investors, who anticipated a boost from S&P 500 inclusion, may face disappointment, potentially leading to short-term selling pressure on MSTR stock. However, long-term Bitcoin bulls may remain unfazed, given MicroStrategy’s commitment to its Bitcoin strategy.

Overall, the exclusion limits MicroStrategy’s immediate growth potential and reinforces the S&P 500’s conservative approach to crypto-driven businesses, impacting both the company and broader crypto market dynamics.