MicroStrategy's Nasdaq 100 Tenure: A Critical Test for Bitcoin-Backed Business Models

The Nasdaq 100 index has long been a barometer of innovation in the technology sector, but its inclusion of companies like MicroStrategy-now rebranded as Strategy-has sparked a contentious debate about the boundaries of traditional tech investing. As the index prepares for its annual reshuffle on December 12, 2025, Strategy's continued membership hangs in the balance, with implications that extend far beyond its stock price. The company's transformation from a business intelligence software firm to a Bitcoin-centric treasury business has positioned it as both a pioneer and a cautionary tale in the nascent era of digital asset treasuries (DATs). This analysis examines the risks and institutional credibility of Bitcoin-backed business models through the lens of Strategy's precarious Nasdaq 100 tenure.

The Nasdaq 100 Conundrum

Strategy's inclusion in the Nasdaq 100 has always been controversial. While the company's market capitalization-bolstered by its $59.55 billion in Bitcoin holdings-qualifies it for the index, its business model diverges sharply from traditional technology firms. Critics argue that its operations are indistinguishable from a crypto hedge fund, a classification that index providers like MSCI are actively reevaluating according to a Coindesk report. According to a Reuters report, analysts warn that Strategy's stock could face a 36% year-to-date decline if excluded, triggering passive fund outflows of approximately $1.6 billion. This scenario underscores a critical question: Should a company whose primary asset is Bitcoin be treated as a technology stock?

The Nasdaq 100's criteria prioritize market size and liquidity, but they lack explicit definitions for "technology." This ambiguity has allowed Strategy to retain its spot despite its lack of recurring software revenue. However, as MSCI and other index providers reassess their methodologies to exclude crypto treasury companies, the broader market may soon face a reckoning. If Strategy is removed, it could signal a shift in how institutional investors value Bitcoin-backed businesses, potentially reshaping the DAT sector's access to capital.

Institutional Adoption and Regulatory Tailwinds

Despite the controversy, Bitcoin's institutional adoption has reached unprecedented levels in 2025. A report by SSGA notes that 86% of institutional investors now have exposure to digital assets or plan to allocate capital to them in the coming year. This surge is driven by regulatory clarity, including the U.S. Strategic Bitcoin Reserve established in March 2025 and the passage of the GENIUS Act, which streamlined the approval of spot Bitcoin ETPs. These developments have legitimized Bitcoin as a reserve asset, with over 200 public companies adopting DAT strategies by September 2025.

Yet, the institutional embrace of Bitcoin is not without caution. Galaxy Research highlights that while crypto-collateralized lending hit $73.59 billion in Q3 2025, tighter risk controls and full collateralization standards have become the norm after past volatility. Similarly, Fidelity Digital Assets observed sustained inflows into Bitcoin ETPs but emphasized the need for macroeconomic vigilance. These trends suggest that while institutions are increasingly comfortable with Bitcoin, they remain wary of its structural risks-risks that are amplified in companies like Strategy.

Credit Rating and Structural Risks

Strategy's recent credit rating from S&P Global-a historic first for a Bitcoin treasury company-reveals the agency's skepticism. The 'B-' rating places the company in speculative-grade territory, citing concerns over asset concentration, limited U.S. dollar liquidity, and a currency mismatch between Bitcoin assets and dollar-denominated obligations. S&P acknowledged Strategy's ability to access capital markets without selling its Bitcoin reserves but warned that a decline in Bitcoin's value or investor appetite could constrain refinancing options.

This rating is a double-edged sword. On one hand, it validates Bitcoin's emergence as a collateral asset within traditional finance, potentially unlocking billions in institutional capital for DATs. On the other, it underscores the fragility of a business model reliant on a single volatile asset. As of November 2025, Strategy holds 660,624 BTC, but its debt and dividend obligations remain in fiat. This creates a liquidity risk that could intensify if Bitcoin's price volatility resurges-a scenario that remains plausible given the asset's history.

Index Exclusion Risks and Market Implications

The potential exclusion of Strategy from the Nasdaq 100 is not merely a technicality; it is a litmus test for the viability of Bitcoin-backed business models. If removed, the company would face immediate outflows from passive funds, which are required to divest holdings that no longer meet index criteria. This could exacerbate its stock price decline and force a reevaluation of its capital structure, which relies heavily on convertible debt.

Moreover, such an exclusion could ripple through the DAT sector. Over 200 public companies now hold Bitcoin on their balance sheets, using it as a proxy for equity exposure. A loss of confidence in Strategy's model might prompt regulators to scrutinize these firms more closely, particularly in light of the ECB's warning that growing crypto-asset integration poses financial stability risks. While the U.S. BITCOIN Act of 2025 provides a domestic framework, global regulatory divergence-such as China's restrictive policies-could further complicate the sector's growth.

The Broader Implications

Strategy's tenure in the Nasdaq 100 is more than a corporate milestone; it is a microcosm of the broader tension between innovation and institutional credibility in the digital asset space. The company's survival as a Bitcoin treasury business hinges on three factors:
1. Regulatory Consistency: Clear, harmonized rules are essential to prevent fragmentation and ensure DATs can operate without geopolitical uncertainty.
2. Liquidity Management: Companies must diversify their capital structures to mitigate currency mismatch risks, potentially through dollar-backed debt or hybrid instruments.
3. Market Resilience: Bitcoin's price volatility remains a wildcard. While its first-mover advantage and $1.65 trillion market cap suggest long-term durability, short-term swings could destabilize even the most well-capitalized DATs.

For investors, the key takeaway is that Bitcoin-backed business models are not inherently flawed but require rigorous risk management. Strategy's inclusion in the Nasdaq 100 has bought time for the sector to prove its legitimacy, but the December reshuffle will be a pivotal moment. If the index retains Strategy, it may signal a green light for DATs. If not, it could force a reckoning with the structural vulnerabilities of a business model built on a single asset class.

In the end, the Nasdaq 100's decision will not just affect one stock-it will shape the future of digital asset treasuries.