The Future of Bitcoin Treasury Companies in Mainstream Indices

The rise of Bitcoin treasury companies-publicly traded firms that allocate significant portions of their balance sheets to cryptocurrencies-has sparked a contentious debate about their place in mainstream financial indices. At the heart of this debate lies a fundamental question: Should firms like MicroStrategy (MSTR), which transitioned from a software company to a Bitcoin-focused investment vehicle in 2020, be classified as operating businesses or investment funds? This distinction carries profound implications for their inclusion in indices like the S&P 500 and Nasdaq 100, which shape trillions in institutional and retail capital flows.

The Bitcoin Treasury Model: Innovation or Speculation?

Bitcoin treasury companies operate by issuing equity or debt to raise capital, which is then allocated to Bitcoin and other digital assets. These firms often emphasize yield generation through staking (e.g., Ethereum) or strategic asset diversification (e.g., Solana, Litecoin). For example, Bit Digital Inc. reported holding 154,398.7 ETH in November 2025, generating a 3.05% annualized staking yield, while Upexi reported a 7-8% yield from Solana staking. Proponents argue that these models democratize access to digital assets and offer institutional-grade exposure to crypto markets.

However, critics contend that such firms lack traditional revenue streams and rely heavily on the performance of volatile assets. MicroStrategy, the largest corporate Bitcoin holder, has faced mounting scrutiny for its valuation model, which is largely tied to the price of Bitcoin rather than operational metrics. This has led index providers like MSCI to propose reclassifying companies where digital assets exceed 50% of total assets, arguing they function more like investment funds than operating businesses.

Index Inclusion Criteria: A Shifting Landscape

The S&P 500 and Nasdaq 100 have historically prioritized market capitalization, profitability, and liquidity when selecting constituents. However, the rise of Bitcoin treasuries has forced these indices to reevaluate their criteria. In September 2025, MicroStrategy was excluded from the S&P 500 during a quarterly rebalancing, despite meeting basic eligibility thresholds. JPMorgan analysts attributed this to a "higher bar" for crypto firms, reflecting concerns about their business models according to market analysts.

The Nasdaq 100, which retains MicroStrategy as of December 2025, has also tightened its criteria. While the index currently classifies MicroStrategy under the technology sub-category according to Nasdaq filings, it has discretion to remove companies that no longer align with its standards. MSCI's proposed exclusion of firms with over 50% crypto assets could trigger $8.8 billion in passive outflows, underscoring the financial stakes for these companies.

Risks and Rewards: The Double-Edged Sword of Index Inclusion

Inclusion in major indices can amplify a company's liquidity and visibility, but it also exposes it to volatility tied to index rebalancings. For Bitcoin treasuries, the risk is twofold:
1. Valuation Volatility: Firms like MicroStrategy derive much of their value from unrealized gains in Bitcoin holdings. A sharp drop in crypto prices could erode market capitalization, jeopardizing index eligibility.
2. Regulatory and Classification Uncertainty: Index providers are under pressure to align with traditional financial norms. MSCI's proposed reclassification of Bitcoin treasuries as investment funds would exclude them from equity indices, redirecting capital flows.

Conversely, inclusion in indices like the Nasdaq 100 provides credibility and access to passive investor inflows. Nasdaq's third-quarter 2025 results, which included $206 million in index revenue and $91 billion in net inflows over 12 months, highlight the growing influence of index-linked capital. For Bitcoin treasuries, maintaining inclusion is critical to sustaining institutional interest.

Long-Term Sustainability: Can Bitcoin Treasuries Adapt?

The long-term viability of Bitcoin treasury companies hinges on their ability to balance innovation with traditional financial expectations. Some firms are diversifying strategies to mitigate risks: Lite Strategy now holds 929,548 LTC tokens, while TaoWeave focuses on niche assets like Bittensor (TAO). These moves aim to reduce overreliance on Bitcoin and demonstrate operational resilience.

However, structural challenges remain. The market net asset value (mNAV) metric-a ratio comparing a company's enterprise value to its digital asset holdings-reveals a key vulnerability. An mNAV below 1 indicates investors are discounting the firm's value relative to its crypto holdings, signaling skepticism about its business model. For Bitcoin treasuries to thrive, they must prove they can generate value beyond mere asset speculation.

Conclusion: A Tipping Point for Crypto and Capital Markets

The debate over Bitcoin treasury companies in mainstream indices reflects a broader tension between innovation and tradition. While firms like MicroStrategy have pioneered new financial models, their inclusion in indices like the S&P 500 and Nasdaq 100 remains contingent on resolving classification disputes and demonstrating operational sustainability. As MSCI and Nasdaq refine their criteria, the outcome will shape not only the fate of individual companies but also the trajectory of crypto's integration into global finance.

For investors, the lesson is clear: Bitcoin treasuries offer high-risk, high-reward potential, but their long-term success depends on navigating regulatory, market, and structural headwinds with agility and transparency.