Is Bitcoin Disqualifying Strategy from the S&P 500? Peter Schiff Weighs In

Economist Peter Schiff has raised concerns about Strategy’s aggressive investment in Bitcoin, questioning its impact on the company’s eligibility for inclusion in the S&P 500 index. Despite a strong year for the broader stock market, some companies, including Strategy (MSTR), have faced significant declines. Schiff argues that the company's focus on Bitcoin may not provide the best corporate strategy, especially as it experiences dramatic stock fluctuations.

Key Takeaways

Peter Schiff criticizes Strategy’s Bitcoin-heavy approach, suggesting it could hinder S&P 500 eligibility.
The S&P 500 saw a 17.3% increase in 2025, yet some stocks, including Strategy, suffered considerable losses.
Strategy’s stock declined significantly in the second half of the year, despite its ongoing Bitcoin accumulation.
The company meets some S&P 500 quantitative requirements but may face challenges due to its business model centered around Bitcoin.
Analysts note that inclusion in the S&P 500 depends on operating businesses rather than investment-focused structures.

Is Bitcoin Disqualifying Strategy From the S&P 500? Peter Schiff Thinks So

Bitcoin's Impact on Strategy's Performance

Peter Schiff has once more voiced his criticism of Strategy's Bitcoin-centric corporate strategy, prompting new discussions about whether the company's performance qualifies it for the S&P 500 index. In a post on X, he pointed out that if Strategy were part of this benchmark index, its significant decline of 47.5% in 2025 would position it as one of the year’s worst-performing stocks.

Schiff argued that the company's aggressive accumulation of Bitcoin has negatively affected its shareholders, suggesting that the substantial drop in Strategy's stock contradicts the notion that investing in Bitcoin is an optimal corporate strategy.

A Challenging Year for Some S&P 500 Stocks

These comments are made in the context of a robust year for the wider U.S. equity market. The S&P 500 finished 2025 with a 17.3% gain, following previous increases of 23.3% in 2024 and 24.2% in 2023.

S&P 500 Performance

Despite the index’s strong overall performance, individual stock returns varied notably. Numerous large-cap companies faced sharp declines due to unique challenges and changing market conditions.

For example, Fiserv was the worst-performing stock in the S&P 500, posting a nearly 70% drop after falling short of earnings expectations, reducing guidance, and receiving customer complaints. The Trade Desk closely followed with a decline of about 68%, impacted by slower revenue growth and increased competition.

Gartner Performance

Sarepta Therapeutics saw an even steeper fall of over 80% due to complications related to its gene therapy treatments and subsequent regulatory warnings.

Other companies like Deckers Outdoor, Gartner, and Lululemon Athletica each lost more than 50% of their value, as they struggled with weaker forecasting, restructuring plans, or prolonged growth hurdles.

Strategy’s Stock Struggles Despite Bitcoin Gains

Strategy, trading under the ticker MSTR, is not included in the S&P 500 but draws attention due to its notable 2025 performance that drew parallels with it. The stock began the year at around $300 and experienced significant gains of about 50% in the first quarter as Bitcoin prices increased, reaching a peak of $457.22 on July 16.

Strategy Performance

However, this rally took a turn in the latter half of the year, as Bitcoin prices fell and investor sentiment shifted. By late September, the stock had lost all its year-to-date gains, which worsened by the fourth quarter, leaving MSTR at a low of $151.42 by December 31. Ultimately, it wrapped up the year with a decrease of around 49.35%, making it the poorest performer in the Nasdaq-100 for 2025.

Despite the stock slump, Strategy has continued to grow its Bitcoin holdings. By the end of December, the company owned 672,497 Bitcoin, with an average acquisition cost of around $75,000 per coin.

MSTR Bitcoin Holdings

With Bitcoin's current price hovering around $87,800, these holdings are valued at nearly $59 billion, leading to an unrealized gain of about 17%. On December 29, the company reported another purchase of 1,229 Bitcoin for about $108.8 million, funded through its ongoing stock offerings. Executive chairman Michael Saylor highlighted that the Bitcoin yield for Strategy in 2025 was at 23.2%.

The Challenge of Entering the S&P 500

While Bitcoin isn’t the direct cause of Strategy’s potential disqualification from the S&P 500, the company's structural dependence on Bitcoin poses significant challenges.

By late 2025, Strategy met the fundamental quantitative criteria required by the S&P 500, including market cap and profitability, primarily driven by its Bitcoin-related earnings.

Inclusion in the S&P 500, however, is not guaranteed, as the final decisions are made by a committee that favors operational businesses over asset-oriented entities. This committee has shown hesitance to incorporate firms whose valuations are heavily reliant on treasury-like assets rather than producing goods or services.

Analysts point out that Strategy now resembles a Bitcoin-focused proxy, similar to a closed-end fund, making it ineligible under current index regulations. This stands in contrast to companies like Tesla or Block, both of which hold Bitcoin yet generate revenue through various operational channels.

Historically, significant declines in stock prices do not disqualify businesses from the index, as many companies have bounced back from severe downturns. Conversely, mere price spikes do not ensure inclusion, as the committee considers sustainability, volatility, and essential business fundamentals before adding any company to the index.