- Strategy is about to join the S&P 500 this week.
- UAE crypto exchange Freedx’s Chief Business Officer warns of Strategy’s investment method, which copies a model companies used just before the Great Depression.
Strategy and the S&P 500
Last week has been a rollercoaster ride for Bitcoin (BTC) and the rest of the cryptocurrency market. During the period, the premier digital asset exhibited a downward trend, taking its price from $115K to $108K.
Despite the fluctuations, Michael Saylor, Executive Chairman of Strategy (formerly MicroStrategy), hints at another possible big Bitcoin purchase announcement on Monday. The insinuation comes hot on the news that their company is about to join the S&P 500 as early as this week.
Standard and Poor’s 500 or S&P 500 is a stock market index. It tracks the performance of the 500 largest public companies in the US. Additionally, it is one of the most commonly followed indices in the country, which covers 80% of the available market capitalization of US public companies. It reported a $49.8 trillion market cap as of March 2025.
The development adds to the accolades of Strategy within traditional finance (TradFi) after penetrating the Nasdaq 100 last December. The index comprises the largest non-financial companies listed on the Nasdaq exchange.
Strategy has the largest Bitcoin treasury among other publicly traded companies worldwide. Based on its disclosure last Monday, it possesses 632,457 BTC in its coffers, making up around 3.01% of Bitcoin’s 21 million limited supply. Meanwhile, the company’s market cap sits at $96.02 billion.
Freedx Crypto Exchange Official Warns of an Old Trick Up in Strategy’s Sleeve
Anton Golub, Chief Business Officer of Freedx in the UAE, warned of glaring similarities between Saylor’s Bitcoin market Net Asset Value (mNAV) playbook and an old investment trick in the 1920s. Now, some readers may already see where this is going since anything that’s a rehash of a move employed by stock exchanges in that period always spells bad news, because it eventually led to the Great Depression. The resulting crash was so severe that regulators banned the model in the 1940s.
The official of the UAE crypto exchange recalled that back in those days, companies raised money from investors through Investment Trusts, which the issuers used to buy stocks. Then, they listed the trust on an exchange and traded it at a big premium over NAV. The investment vehicle was leveraged to multiply returns.
The scheme is all too similar to the way Strategy raises perpetual preferreds, converts, and common stocks, only to use their proceeds to buy BTC. From there, it trades MSTR above its Bitcoin holdings at mNAV premium. Later, it sells more stocks to buy more of the asset and repeat the cycle.
Golub claimed that Strategy’s house of cards could immediately scatter if Bitcoin drops 50%. This will lead investors who bought MSTR at two times mNAV to 75% losses. The same market cycle built on leverage and heavily capitalized continuously on the upside could crash hard once Bitcoin’s next bear cycle occurs. Hence, he advised people to act accordingly.
“[The] same ‘infinite money machine’ that juiced the upside is now threatening to unwind the whole thing,” said Golub. “History is not repeating. It’s screaming.”
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