Bitcoins
- Several nations including the US, Pakistan and others are establishing strategic Bitcoin reserves, recognising cryptocurrency as a national-level strategic asset despite corporate enthusiasm waning.
- Corporate Bitcoin treasury strategies face mounting pressure with reduced investor appetite, slower equity issuance, rising borrowing costs and growing scepticism toward exotic crypto-linked instruments.
- The S&P 500’s rejection of Strategy despite meeting eligibility criteria signals broader reluctance to include firms functioning as Bitcoin holding vehicles.
- Tightening market conditions include Nasdaq requiring shareholder approval for crypto-heavy share issuances and Strategy abandoning its pledge not to sell below specific valuation multiples.
While corporate enthusiasm for Bitcoin-centric treasury strategies is faltering – at least according to JPMorgan analysts – several nations are moving in the opposite direction.
The United States is progressing on a Strategic Bitcoin Reserve through an executive order from March 2025, joining El Salvador, which has been steadily accumulating Bitcoin since 2021 and Bhutan, which integrates mining into its state-backed holdings.
Pakistan followed with its own reserve announcement in May, and legislative efforts are advancing in countries like Kyrgyzstan and Kazakhstan. Together, these developments underscore a recognition of Bitcoin as a strategic asset at the national level.
Corporate Models Under Pressure
In contrast, public companies that have built their balance sheets around Bitcoin are running into headwinds. Investors and lenders are showing reduced appetite for equity and debt tied to crypto-heavy treasuries.
Equity issuance has slowed, borrowing costs are rising, and exotic instruments such as bitcoin-backed loans or token-linked convertibles are drawing scepticism rather than enthusiasm.
JP Morgan analysts suggest that capital is more likely to flow toward exchanges, miners and other operators with revenue-generating businesses rather than balance-sheet plays.
Related: Bitwise CIO: Banks Should Reward Customers Instead of Fearing Stablecoins
The S&P 500 Draws a Line
This shift was highlighted by the S&P 500 index committee’s decision to deny entry to Strategy (formerly MicroStrategy), despite the company meeting eligibility thresholds.
JPMorgan analysts, led by Nikolaos Panigirtzoglou, argued the move reflects a broader reluctance to elevate firms that function as de facto Bitcoin holding vehicles.
This comes just days after Michael Saylor spoke with great confidence, telling CNBC that the inclusion in the index “will happen”.
Historically, Strategy’s stock benefitted when Bitcoin exposure was funnelled through major benchmarks such as the Nasdaq 100, MSCI USA, and the Russell 2000. The S&P 500 exclusion, however, indicates that this indirect exposure channel is losing momentum and may no longer provide the same uplift.
Tightening Market Conditions
The financial environment is compounding the pressure. Nasdaq now requires crypto-heavy companies to secure shareholder approval before issuing new stock, and Strategy has abandoned its prior pledge not to sell below a 2.5x multiple.
With debt carrying higher premiums and equity sales harder to execute, JPMorgan noted that fatigue is visible in both trading activity and financing.
Related: Blockchain Game Alliance Launches Revamped Global Industry Survey
Aaron Feuerstein Read More