Why did the S&P 500 include Robinhood but reject Strategy?

Coinbase and Block are the first crypto-native companies that were added to the S&P 500 stock market index. There was much talk that Michael Saylor’s Strategy will be the next one soon. Market analyst Jeff Walton said it’s a 91% chance that Strategy will succeed. However, the committee rejected the company. At the same time, Robinhood was approved for inclusion. What does Robinhood offer that Strategy does not?

Summary

• Inclusion in the S&P 500 index would have given Strategy over $10 billion in passive income inflows, much needed to pay liabilities and keep buying Bitcoin.
• Strategy met all main criteria for inclusion, but the S&P committee rejected Michael Saylor’s company.
• Robinhood turned out to be a sudden winner. It has a larger market cap than Strategy. This year, the company’s value doubled.

Table of Contents

• Importance of inclusion in the S&P 500
• Why Strategy was excluded
• Robinhood’s surprise inclusion

Importance of inclusion in the S&P 500

The S&P 500 index is composed of shares of 500 American public companies with the biggest market capitalization. It’s a crucial U.S. stock market benchmark representing the equities of the most powerful corporations. The index is managed by S&P Dow Jones Indices, owned by S&P Global. While it is not possible to invest directly in the S&P 500 index, investors buy shares of the mutual funds or exchange-traded funds that mirror the S&P 500 index value.

As the index is sometimes seen as a “good proxy of the U.S. equity market,” joining it comes with serious benefits for the company. First off, the company gets significant passive income inflows as it becomes a part of the assets basket targeted by huge amounts of retail and institutional investors. For Strategy, this amount was evaluated at over $10 billion.

On top of that, as the corporation joins the S&P 500 index, its stock prices go up. For example, Robinhood stock (HOOD) jumped 7% within hours of its inclusion announcement. For MicroStrategy, missing out on these benefits was a major setback, especially since many viewed inclusion as highly likely. Investors reacted quickly, sending MSTR down 3%.

Why Strategy was excluded

Strategy’s rejection was both surprising and disappointing to many. Strategy, the biggest corporate Bitcoin holder, owning over 3% of the total BTC supply, posted a strong Q2 with a $10 billion net income. The company fitted all eight criteria of the S&P 500 index. So, why did the committee reject it?

The S&P committee doesn’t disclose reasons for rejection, but several factors may have played a role. First, the company needs to have an excellent track record, including consistent positive Generally Accepted Accounting Principles (GAAP) earnings, to get into the S&P 500 index. That’s where Strategy faced a problem. Before 2025, the accounting rules for Bitcoin holding were different than now. They required indicating Bitcoin impairment charges while not displaying the price surges. Thus, before 2025, Strategy had GAAP losses instead of earnings.

Another possible reason is Bitcoin’s volatility. Because Strategy’s performance is tied closely to the price of BTC, the committee may have decided that adding the company would increase volatility within the index. Finally, the committee may prefer to wait for clearer regulations around Bitcoin-focused businesses before granting inclusion.

The X users cite other possible reasons: from falling MSTR price to the need for a longer streak of positive quarter reports. Generally, it’s safe to say that despite impressive achievements, Strategy is facing a tough period. In August, the company had to rethink its strategy to allow more flexibility, but disappointed investors already noted that the share premium over Bitcoin is gradually going down.

Probably, Strategy will be included in the S&P 500 index later. Tesla and Facebook had to wait for inclusion for months after meeting all the criteria. While Strategy failed to enter the S&P 500 index list, Michael Saylor himself achieved another milestone. Two days after the S&P committee snubbed Strategy, Saylor was included in the Bloomberg billionaire index. He’s not the first nor the biggest crypto entrepreneur to join it, though. 

Robinhood’s surprise inclusion

The same day when Strategy was left out of the S&P 500 race, Robinhood Markets, unexpectedly (to many), was set to be included in the index on September 22. The news moved the HOOD stock price 7% up. 

Some in the crypto community were surprised to see Robinhood joining the S&P 500, as they remember the cases when the company was treating its clients poorly, at one instance, it resulted in a client’s suicide. Security breaches, data leaks, and legal disputes followed Robinhood for years. 

However, the company managed to thrive. The HOOD price growth exceeded 150% year-to-date. With a market cap exceeding $100 billion (around $10 billion more than Strategy’s), Robinhood was one of the biggest companies still waiting to be included in the S&P 500.

Robinhood made its name through creating a handy app where users can easily trade digital assets alongside stocks, making investing and trading popular among younger generations. Unlike Strategy, Robinhood has diversified revenue sources, which probably contributed to the prioritized inclusion in the S&P 500.

While Strategy was excluded, Robinhood’s inclusion signals that the doors are open for the cryptocurrency business. Retail and institutional investors are gradually embracing it. Will see how many crypto-native companies will get included in the S&P 500 in a year.