Original Author: Eric, Foresight News
This week, FTSE Russell announced the preliminary list for the 2026 Russell 3000 Index. This index rebalancing added multiple cryptocurrency-related stocks, with CoreWeave (CRWV), Iren Limited (IREN), and Galaxy Digital Holdings (GLXY) all appearing on the new addition list.
Additionally, Ethereum DAT companies BitMine (BMNR) and Sharplink (SBET), as well as the SOL DAT company Forward Industries (FWDI), are also on the list. Barring any unforeseen circumstances before June 29th, trillions of dollars in passive funds tracking the Russell indices will subsequently be forced to allocate to these assets, regardless of individual fund managers' views on cryptocurrency.
This is undoubtedly good news for investors in crypto-related stocks, but it's hard to say the same for the cryptocurrencies themselves.
What are the Russell Indices?
The Russell index family, managed by FTSE Russell under the London Stock Exchange Group, is one of the most influential U.S. equity benchmarks globally. The Russell 3000 Index covers the top 3,000 U.S. companies by market capitalization, representing approximately 98% of the investable U.S. equity market. Two core sub-indices derived from it, the Russell 1000 (large-cap, the top 1,000 companies) and the Russell 2000 (small-cap, the remaining 2,000 companies), are also key components of the capital markets.
Each year in June, FTSE Russell conducts a full reconstitution based on market capitalization data from the end of April. Starting in 2026, this frequency will increase to semi-annually (June and November) to reflect market changes more quickly.
As of 2026, approximately $20 trillion in assets are benchmarked against FTSE Russell indices, with the Russell U.S. index series alone carrying about $10.6 trillion of that capital. This means any company entering a Russell index immediately becomes a mandatory allocation target for massive passive funds.
Funds tracking the Russell indices primarily come from two types of products: ETFs and index funds. Taking the Russell 2000 as an example, the largest tracking vehicle is BlackRock's iShares Russell 2000 ETF (IWM), with assets under management (AUM) of about $75 billion and daily trading volume exceeding 26 million shares, making it one of the most liquid small-cap ETFs globally. Next is Vanguard's Russell 2000 ETF (VTWO), managing approximately $13.6 billion in assets with an expense ratio of just 0.07%, making it a top choice for long-term passive investors. Furthermore, there are numerous institutional products like Vanguard's Russell 2000 Index Mutual Fund (VRTIX) and BlackRock's Russell 2000 Index Fund.
These funds are managed "passively": their sole goal is to replicate the index's performance as precisely as possible, not to select stocks actively. Therefore, when a stock is added to the index, these funds must buy it according to its weight after the adjustment takes effect; similarly, removed assets are forcibly sold. This mechanism makes the Russell reconstitution day (typically the last Friday in June) one of the highest trading volume days of the year in U.S. stocks. On the adjustment day in 2024, closing volume set a record of nearly $220 billion.
Historical data shows that companies added to the Russell indices often experience significant price volatility around the adjustment period. According to various studies, companies newly added to the Russell 2000 can achieve an average price increase of 5%-10% in the short term following the adjustment's effective date, entirely due to forced buying by passive funds. This effect may be even more pronounced for crypto-related stocks like BitMine, which have relatively smaller market caps and lower liquidity.
For DAT companies, stock price increases triggered by passive buying are more conducive to issuing additional shares to purchase more cryptocurrency. If their inclusion in the Russell indices is finally confirmed, the "flywheel" that once relied on hype can now be realized with the help of passive funds as a catalyst.
DAT Company Stocks Benefit, but ETH Itself Might Not
Just days before the Russell index list was announced, David Hoffman, co-founder of Bankless and one of the most influential voices in the Ethereum community, liquidated his entire ETH holdings.
Hoffman's explanation was not based on bearishness towards the Ethereum network itself; on the contrary, he stated he is "extremely bullish on the future of the Ethereum network." The problem lies in the core narrative that "ETH is money." In Hoffman's view, Ethereum is essentially a "giver, not a taker." It provides the world's most secure block space at cost, tokenizes global assets at cost, and secures billions of dollars in DeFi protocols at cost. "Charging no fees for any transaction" is the nature of open-source software and the source of Ethereum's strength, yet it directly contradicts the "token appreciation" logic.
Hoffman bluntly stated that Ethereum is the most successful non-profit in human history, but architecturally, Ethereum does not prioritize ETH. This is not a bug but a feature. He believes that only a small portion of the success of the Ethereum network and its ecosystem will be reflected in ETH's price. The application layer and L2 services are capturing most of the value. The rollup-centric roadmap means L2s capture 97% of the profits, while ETH receives only a minimal share.
This reveals a structural dilemma. The stock prices of DAT companies can achieve independent valuation boosts—even trading at a premium relative to their held crypto assets—by leveraging the rules of the traditional financial system (index inclusion, institutional allocation, stock premium). However, when these companies receive capital in the secondary market, these funds do not flow directly into ETH itself.
Given that DAT companies do not constitute a large share of total market capitalization, the inflow of capital from passive allocation, even if confirmed, will likely not be substantial, and the resulting stock price increases may be very limited. On the other hand, both Ethereum and Solana are currently facing difficulties with their token prices. While the buying pressure from DAT companies might offset some selling pressure, it cannot address the fundamental problem that the market is unwilling to assign a higher valuation to the base layer protocols.
In August 2025, Ethereum reached a near $5,000 all-time high. Currently, Ethereum's price is hovering around $2,000. In the nine months during which the price fell nearly 60%, BitMine alone bought between 3.6 and 3.7 million ETH, yet this failed to prevent the price from declining steadily.
Conclusion
The Russell indices opening their doors to cryptocurrency companies is undoubtedly another milestone in the integration of traditional finance and the digital asset world. For companies like CoreWeave, Iren, and Galaxy, this means broader institutional recognition, more stable capital inflows, and higher market liquidity. However, when DAT companies face similar capital inflows, the results may not necessarily benefit the underlying cryptocurrency assets.
Currently, the "ETH is money" narrative is giving way to the reality that "ETH is public infrastructure." The same holds true for Solana and a series of other public chains. While rising on-chain revenue and buyback expectations may support token prices in the short term, this logic harbors an invisible ceiling. Introducing new narratives for token value may be the most critical issue to consider at present.
