Can Bitcoin Really Keep MicroStrategy Out of the S&P 500?

📉 Schiff's Latest Jab: MicroStrategy's Shareholder Wipeout

Peter Schiff has renewed his critique of MicroStrategy's Bitcoin-centric approach, this time questioning whether the strategy would even qualify the company for S&P 500 inclusion. The economist argued on X that if Strategy, formerly MicroStrategy, were part of the benchmark index, its 47.5% decline in 2025 would make it the sixth worst performer of the year. Schiff claimed the company's aggressive Bitcoin accumulation has destroyed shareholder value, directly contradicting executive chairman Michael Saylor's assertion that buying Bitcoin is the best corporate strategy. For investors who bought Strategy stock in early 2025, the critique hits home. The stock's collapse represents one of the most dramatic reversals in the Nasdaq-100, raising legitimate questions about whether a treasury-heavy business model can sustain long-term shareholder confidence.

📊 Winners and Losers: The S&P 500 in 2025

The broader U.S. equity market posted solid gains in 2025, with the S&P 500 finishing up approximately 17.3% for the year. This followed consecutive annual gains of 23.3% in 2024 and 24.2% in 2023, underscoring the index's resilience during a period of economic uncertainty. However, individual stock performance varied dramatically within the index. Fiserv emerged as the worst performer, down roughly 70% after missing earnings expectations and facing client complaints. The Trade Desk followed with a 68% decline, pressured by slowing revenue growth and executive departures. Sarepta Therapeutics plummeted more than 80% following patient deaths and regulatory warnings. For retail investors, these examples highlight how even membership in the S&P 500 offers no protection against company-specific disasters. Strong index performance can mask severe individual stock collapses, a reality that applies equally to potential future additions.

🎢 Strategy's Volatile Year: From $457 to $151

Strategy started 2025 trading near $300 per share and surged approximately 50% in the first quarter as Bitcoin prices climbed. The stock reached an annual high of $457.22 on July 16, 2025, buoyed by enthusiasm surrounding Bitcoin's performance and the company's continued accumulation. That rally reversed sharply in the second half of the year as Bitcoin pulled back and broader risk sentiment shifted. By late September, Strategy had erased all year-to-date gains. The decline deepened throughout the fourth quarter, culminating in an annual low of $151.42 on December 31 before closing slightly higher at $151.95. The stock ultimately finished 2025 down approximately 49.35%, making it the worst performer in the Nasdaq-100 for the year. For shareholders who held through the volatility, the experience demonstrates how leverage and concentrated exposure can amplify both gains and losses. The company's equity performance also lagged Bitcoin itself, raising questions about the premium investors are willing to pay.

₿ Undeterred Accumulation: 672,497 BTC and Counting

Despite the stock's dramatic slide, Strategy continued expanding its Bitcoin holdings throughout 2025. As of late December, the company held 672,497 BTC, acquired at an average cost of approximately $75,000 per coin. At current prices near $87,800, those holdings are valued at roughly $59 billion, leaving the firm with an unrealized gain of about 17%. The company disclosed another purchase on December 29, buying 1,229 Bitcoin for approximately $108.8 million using proceeds from its ongoing at-the-market stock offering. Executive chairman Michael Saylor stated the firm's Bitcoin yield for 2025 stood at 23.2%, a metric the company uses to measure Bitcoin accumulation relative to share dilution. To support this strategy, Strategy launched a cash reserve worth $1.44 billion on December 1 to handle dividend payments on preferred stock and service debt obligations. For institutional investors, this hybrid approach suggests the company is attempting to balance aggressive Bitcoin accumulation with financial stability.

🏛️ The Real Barrier: Business Model, Not Bitcoin

Bitcoin itself is not disqualifying Strategy from the S&P 500, but the way the company is structured around the asset remains the central issue. Strategy met the index's core quantitative requirements in late 2025, including market capitalization and profitability. However, inclusion in the S&P 500 is not automatic. The final decisions rest with a committee that prioritizes operating businesses over investment vehicles. The committee has shown reluctance to add companies whose valuation is dominated by treasury assets rather than products or services. Analysts argue that Strategy now resembles a Bitcoin proxy, similar to a closed-end fund, which is an ineligible structure under index rules. This differs from firms like Tesla or Block, which hold Bitcoin but generate revenue from diverse operations. Historically, steep stock declines do not automatically disqualify companies from S&P 500 inclusion, as many index members have recovered from major drawdowns. The committee evaluates sustainability, volatility, and business fundamentals before listing, making Strategy's operating profile the key question rather than Bitcoin ownership alone.

🎯 What Really Determines S&P 500 Entry

The S&P 500 selection process involves a committee managed by S&P Dow Jones Indices that evaluates companies based on market capitalization, liquidity, profitability, and sector representation. Companies added to the index typically experience the index effect, where mutual funds and exchange-traded funds must buy shares to mirror the benchmark. Funds like Vanguard S&P 500 ETF and SPDR S&P 500 ETF Trust hold over $1 trillion in assets, creating passive demand that often spikes prices 5% to 10% after addition. For Strategy, the challenge is demonstrating that it functions as an operating business rather than an investment vehicle. The company's software operations generate modest revenue compared to its Bitcoin treasury, complicating the committee's assessment. Recent additions like Carvana, which surged 96% in 2025, illustrate that strong stock performance alone does not guarantee inclusion. Strategy's fate will ultimately depend on whether the index committee views its business model as sufficiently operational to warrant inclusion. For investors, the real question is not whether Bitcoin disqualifies Strategy, but whether Strategy's pivot away from traditional software operations has fundamentally redefined what type of company it is.

Sources

https://cryptonews.com/news/is-bitcoin-disqualifying-strategy-from-the-sp-500-peter-schiff-thinks-so/ https://www.investopedia.com/ask/answers/041015/what-history-sp-500.asp https://finance.yahoo.com/news/96-2025-stock-added-p-151210480.html https://finance.yahoo.com/news/michael-saylor-microstrategy-plunges-eve-211556878.html https://www.coindesk.com/markets/2026/01/01/strategy-shares-register-first-six-month-losing-streak-since-adoption-of-bitcoin-strategy-in-2020

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