Strategy in the S&P 500: Why It Matters for MSTR and BTC

Bitcoin is edging higher as stocks decline and gold climbs to a new record. As of writing, BTC/USD is trading around $112,000, up over 4% in the quarter, while being down 9.6% since its all-time high (ATH) above $124,000 that was hit in mid-August.

While digital gold is finally starting to see some positive action, gold is busy making new highs.

This week, the price of gold hit about $3,550 per ounce on the growing conviction of a Federal Reserve rate cut this month. Analysts are expecting the non-yielding gold, which benefits from a lower interest rate environment, to continue its uptrend and make new record highs. 

The rising prices come as investors flocked to the safety of the traditional safe-haven asset amidst the US dollar weakness and geopolitical uncertainty. Diversification away from the dollar and sustained central bank purchases are further supporting the prices. Even silver is enjoying the greens, hitting its highest price level since September 2011.

For gold, ETF inflows are also aiding the rally with the holdings of the world’s largest gold-backed ETF, SPDR Gold Trust, rising to 977.68 tons, the highest since August 2022.

“Central bank buying can continue to hold the floor for gold, but a re-ignition of ETF inflows is needed for prices to break out higher once again.”

– Natasha Kaneva, head of global commodities strategy at J.P. Morgan

The bullion has gained about 35% this year. It has actually been enjoying a massive rally for three years now, with the precious metal up 122% during this period.

Unlike the $24 trillion market cap gold, the price of the $2.2 trillion market cap Bitcoin has increased by 18% YTD and 345% in the past three years.

While Bitcoin also benefits from all the themes that have gold surging, the leading crypto asset has been experiencing weakness as it enters the historically bearish month. In September, BTC averaged losses of 3.26%.

Interestingly, the last two Septembers have been positive ones, with the 2024 one being the best ever at 7.3% returns.

This time around, the historical bearish trend can be mitigated by rate cuts and ETF inflows. The first day of Sept. has already recorded $332.8 million in inflows from institutions, according to data from Farside. Bitcoin Spot ETFs are now holding $143.2 billion in total net assets.

To put the latest moves in perspective, here’s how Bitcoin, gold, and MSTR stack up:

Swipe to scroll →

* Latest as of Sept. 3, 2025. **3-year BTC figure is approximate from Sept. 2022; verify against your preferred index.

In contrast, ETF outflows or equity sell-off can reinforce the historical pattern and push BTC toward the key $100,000 support.

Notably, the seasonality comes at a time when Strategy (MSTR +2.17%)
is experiencing a declining premium over Bitcoin, which has the market concerned about crypto-focused corporate treasury strategies, as well as the company’s potential upcoming inclusion in the S&P 500 index, which has market participants bullish about the incoming flows.

So, things are certainly looking interesting ahead, but how will the Strategy situation pan out? Let’s find out! 

Strategy’s Shrinking mNAV Premium: What It Means for BTC Buys

Michael Saylor’s Strategy first bought Bitcoin in August 2020, spending $250 million to scoop up 21,454 BTC as part of the company’s “new capital allocation strategy.”

At the time, the price of BTC was around $12,000 while the share price of MSTR was about $13. Bitcoin topped the last bull run at $69,000 in Nov. 2021, representing almost a 6x upside. MSTR, meanwhile, surpassed  $130 in Feb. 2021, an increase of over 10x.

In the following bear market, Bitcoin price bottomed under $16,000 in November 2022, a decline of 77% while MSTR went down 90% to as low as $13 in January 2023.

From there onwards, the largest cryptocurrency started surging again during the ongoing bull market, making a new ATH in early 2024 and then surpassing $100K before the year was over. Bitcoin started 2025 around $100K only to fall under $75K in April before surpassing $124K in August.

When it comes to MSTR prices, in early 2024, it surged to $200, and by the time the year ended, it had shot up to a fresh peak of $543, hit in Nov. 2024. It fell back down to about $233 in the first few months of this year. The highest it went in 2025 was $457 in mid-July.

As of writing, the $97.16 billion market cap MSTR is trading at $343, up almost 18% YTD. It has an EPS (TTM) of 11.37 and a P/E (TTM) of 30.05.

Overall, Strategy’s stock has rallied by over 25x since Aug. 2020; Bitcoin’s price has only surged 10x. 

However, MSTR prices are struggling this year, with no new peak seen so far, while Bitcoin has made a few. The drawdown in Strategy’s shares has actually erased much of the premium that the firm had over its Bitcoin holdings. And this has the market worried due to what it could mean for the company’s future BTC purchases as well as the sustainability of the corporate-treasury model Saylor pioneered.

Currently, Strategy is holding a total of 636,505 BTC, representing over 3% of Bitcoin’s fixed 21 million supply.

The $70.6 billion worth of Bitcoin holdings were bought at an average price of $73,765 per BTC for a total cost of about $47 bln, including fees and expenses.

While the company has accumulated a massive stash of the asset, which has garnered a lot of attention from institutions, corporations, and even nation-states, Strategy may face challenges buying more Bitcoin based on the tepid demand its new preferred stock drew from investors.

A recent sale of its stock only managed to raise $47 million, lower than what the company was hoping to, and as such, it had to return to common-share issuance to make up for the gap.

Strategy had pledged earlier that it wouldn’t turn to this model in order to limit dilution. 

In late July, Strategy announced that it will not issue shares at a multiple below 2.5, with narrow exceptions. But a couple of weeks later, the guidance was modified so that the company could issue more common shares “when otherwise deemed advantageous.“ And Strategy did, it sold nearly 900,000 new shares.

Walking back on this guidance has investors worried, and that may negatively impact the company’s ability to keep up with its game plan.

Saylor’s playbook has been to raise debt and equity in order to buy Bitcoin, and as the market assigned a premium, he repeated the cycle. 

“The Premium fuels its MSTR’s equity value through a recursive loop where volatility and Bitcoin exposure attract investor capital, enabling further BTC accumulation that amplifies the Premium,“ noted asset manager VanEck in its May report on Strategy. 

Its aggressive Bitcoin buying strategy means MSTR stock does not trade on the company’s earnings but on a multiple of its Bitcoin or mNAV. The multiple, which went up to 3.4 after crypto-friendly Donald Trump won the US presidential elections, is currently at 1.58. This decline, notably, has come during the bull market as Treasury-style companies proliferate the market.

The playbook inspired a wave of treasury firms, and they now collectively hold more than $100 billion worth of Bitcoin.

This increasing competition, along with alternative ways for traders and investors to gain exposure to crypto, is now causing the decline in MSTR premium, though the originator of the strategy continues to issue shares.

Issuing equity below mNAV risks creating a downward spiral as falling stock weakens the Strategy’s ability to buy Bitcoin, which erodes confidence in the company, in turn, further driving down the premium.

Strategy isn’t alone in this premium compression. Almost a third of publicly traded companies with BTC on their balance sheets are actually trading below the value of those reserves. 

Among these Bitcoin treasuries, smaller firms are particularly vulnerable as they have to deal with interest rate and maturity risks. Because if the price of Bitcoin takes a big dip, say 50% as happens during a bear market, mNAVs will compress even further, potentially toppling the entire treasury strategy and the Bitcoin market.

Saylor, however, maintains that “Bitcoin is still on sale,“ hinting at more future Bitcoin acquisitions.

Analysts at investment bank Benchmark, meanwhile, came in support of the Strategy.

“Amid a proliferation of Bitcoin strategy companies, MSTR remains the industry standard and benchmark,“ wrote analysts and gave it a buy rating with a $705 price target. 

In fact, the company’s voluntary limitation may have a “chain reaction,“ according to Benchmark, which noted that the market interpreted the sliding mNAV as a negative sign for its ability to buy BTC, with “premium compression begetting more compression.“ And while the idea behind the decision was to support the mNAV, it became “counterproductive by starving the program of cheap capital.”

According to Benchmark analysts:

“The upshot is that we continue to view MSTR as the cleanest and most liquid way to own the upside in bitcoin without taking mining-execution risk.“ 

S&P 500 Inclusion: Timing, Passive Flows, and the Knock-On for Bitcoin

While the market is closely watching Strategy’s slipping premium over Bitcoin amidst the looming September seasonal weakness, the company is preparing for a big moment, a potential inclusion in the S&P 500.

The decision that could come as early as this Friday is breathing a fresh wave of excitement and momentum into the Bitcoin market. 

The Index, as the name suggests, tracks the performance of 500 of the largest publicly traded companies in the US. This makes it more diverse than the Dow Jones, which only tracks 30 stocks, or the NASDAQ-100, which comprises 100 stocks.

The S&P 500 represents about 80% of the total US equity market cap. It recently shot up to a new high above 6,500, representing gains of 7.83% in the past three months and YTD gains of almost 9.5%.

Managed by S&P Global’s subsidiary S&P Dow Jones Indices, the index is float-adjusted and weighted by market capitalization.

The Standard Statistics Company first developed its stock index over a century ago, which covered less than half of what it does now, just 233. Then, close to two decades later, it merged with Poor’s Publishing to become Standard and Poor’s (S&P).

Today, the S&P 500 Index is one of the most widely used indexes for the US stock market, representing the largest and most liquid companies. These companies range from technology, software, and banks to IT, healthcare, and manufacturers, covering a wide variety of sectors to offer investors diversification. 

While created by a private company, the S&P 500 is used as a benchmark for the overall health of not only the nation’s stock market but also the economy.

Now, to invest in the S&P 500, one can’t do it directly as it’s an index; one has to do so indirectly through the funds that use it as a benchmark and track its performance and composition. An index fund that does this must hold all the 500 stocks in the exact proportion as their index weightage. The index isn’t fixed, though, and constantly changes. 

Because companies grow, shrink, merge, or go bankrupt, the list of constituents is periodically rebalanced to accurately reflect the US economy and stock market performance. For this, the index is reviewed quarterly by the S&P Dow Jones Indices Committee.

The S&P 500 rebalancing is scheduled for this month, with an announcement on a possible inclusion expected on September 5, followed by the subsequent addition of the stock on September 19.

In order to join the index, companies are required to meet certain requirements regarding market capitalization, liquidity, profitability, and share distribution. These requirements include a trading history of twelve months, a certain average monthly volume, and positive earnings over four quarters. Moreover, the company must be based in the US and be publicly traded.

Now, with its strong Q2 2025 earnings, Strategy qualifies for the listing on the S&P 500.

For the second quarter, the company reported a 2.7% YoY increase in revenue to $114.5 million. Meanwhile, operating income was $14 billion and net income was $10 billion. Its diluted earnings per share (EPS) were $32.60.

The figure was aided by the new fair-value accounting standards that allow Strategy to record unrealized gains on its Bitcoin holdings, which boosted its reported profits and strengthened the balance sheet. Its updated full-year guidance projects an even stronger position if the price of Bitcoin reaches $150,000.

The company reported a year-to-date (YTD) Bitcoin yield of 19.7%.

Moreover, the market cap of Strategy has grown past the minimum threshold of $22.7 billion as it approaches the $100 billion mark. Its float also surpasses the 50% level required by the index committee.

Strategy’s inclusion in the S&P 500 would mark a major moment for the crypto sector, as that would make it the third cryptocurrency-related company to become a part of US equity markets. 

Jack Dorsey’s financial technology company, Block (SQ +0.57%) (formerly Square), which is known for its Cash App and holds Bitcoin on its balance sheet, is among the crypto firms on the index. Meanwhile, Coinbase (COIN +0.51%), which, unlike Strategy and Block, represents the pure crypto play, only got added to the index in May this year.

Strategy, however, would be the first one defined by its huge Bitcoin holdings and could provide massive BTC exposure through traditional investment channels.

Previously known as MicroStrategy, Strategy was founded in 1989 as an enterprise software firm that provides cloud-native, AI-powered analytics software. In addition to being a business intelligence company, it became a Bitcoin treasury firm five years ago.

Investment banking firm Benchmark’s analysts are of the view that Strategy’s inclusion in the S&P 500 would drive billions of dollars in passive demand for MSTR shares. However, they also noted that Strategy could be viewed differently from others, as its income almost entirely comes from fluctuations in the value of its BTC holdings.

Still, a potential inclusion is expected to drive massive investments in Strategy and, by extension, Bitcoin.

After all, institutional funds tracking the S&P 500 have to purchase shares of companies admitted to the index, which leads to increased liquidity and higher trading volumes for those included. In this case, that means Saylor’s Strategy, and given its link to BTC, all the capital flow may trickle into Bitcoin markets as well.

Strategy, as we noted above, has a massive Bitcoin stash, so much so that it is the leading publicly traded company with the largest BTC holdings. Their vast Bitcoin exposure means any development that affects Strategy’s market reach and financials could directly or indirectly impact the liquidity and adoption of the digital asset as well.

Besides adding more credibility to Bitcoin as a mainstream financial asset and normalizing crypto exposure within institutional portfolios, market participants expect the inclusion to unlock billions in capital.

Investor Lark Davis took to social media to share his excitement, writing:

“When it (listing) happens, billions in boomer money will start pouring into MSTR and Bitcoin.”

Bottom Line: Can S&P 500 Inclusion Reverse MSTR’s Premium Slide?

As both Bitcoin and Strategy go through a rough time with prices lagging, the S&P 500 inclusion could be the catalyst to make the market green.

Although MSTR’s premium is eroding, which raises questions about sustainability, the index listing could offset those concerns by unlocking billions in passive inflows. It can also reshape Bitcoin’s role within global financial markets, helping integrate it deeper into global finance.

So, the potential upcoming inclusion of the world’s largest Bitcoin treasury in the prestigious S&P 500 Index marks a big milestone that can change the tide, driving MSTR prices higher and even turning September into a green month for Bitcoin!

Click here to learn all about investing in Bitcoin (BTC).