Strategy (MSTR), the publicly traded firm known for holding the largest Bitcoin reserve of any listed company, is now on the brink of being added to the S&P 500, but only if Bitcoin avoids a steep drop before the second quarter ends.
Key Takeaways:
Strategy’s S&P 500 inclusion hinges on Bitcoin staying above $95,240 through June 30. New accounting rules allow BTC gains to count toward earnings, making its price critical for Q2 results. Analyst Jeff Walton gives a 91% chance of inclusion, based on Bitcoin’s historical stability over short timeframes.Financial analyst Jeff Walton said in a video published Tuesday that Strategy has a 91% chance of qualifying for inclusion in the S&P 500, provided Bitcoin’s price does not fall more than 10% before June 30.
At the time of his analysis, BTC was trading around $106,044.
MicroStrategy’s S&P 500 Bid Hinges on Bitcoin Holding $95K Line
Walton pinpointed $95,240 as the critical level; if Bitcoin closes below that threshold, MicroStrategy may fail to meet earnings eligibility criteria.
“To be considered for the S&P 500, a company must report cumulative positive earnings across the past four quarters,” Walton explained.
Strategy has posted losses in the last three quarters, and with its massive Bitcoin holdings, currently 592,345 BTC, its earnings for Q2 heavily depend on the crypto asset’s fair market value.
The stakes are heightened by recent volatility. Over the weekend, Bitcoin dipped below $100,000 amid renewed geopolitical tensions between Israel and Iran, briefly jeopardizing Strategy’s position.
However, prices have since rebounded, with BTC trading near $106,200 as of Wednesday.
Strategy adopted new accounting standards (ASU 2023-08) at the start of 2024, allowing unrealized gains and losses on its Bitcoin stash to be reflected in net income.
The change significantly impacts its financial statements and S&P 500 eligibility.
Walton’s forecast is based on historical BTC price behavior. Since September 2014, in over 3,900 six-day periods, Bitcoin fell more than 10% just 343 times — or roughly 8.7% of the time.
“The longer we go without a drop, the lower the odds get,” Walton noted. For instance, the odds of a 10% fall shrink to 4.2% if only two days remain in the quarter.
If successful, Strategy would become the second crypto-related company to join the S&P 500 in 2025, following Coinbase’s inclusion in May.
In December 2024, Strategy was added to the Nasdaq-100, joining the ranks of tech giants.
Strategy Could Become Top Publicly Traded Company in World
In May, Walton said Strategy may one day rise to become the top publicly traded company in the world.
Walton believes the company’s unprecedented exposure to Bitcoin gives it a unique edge.
“Strategy holds more of the best asset and most pristine collateral on the planet than any other company, by multiples,” he said.
As reported, Strategy plans to raise as much as $2.1 billion through the sale of its 10% Series A Perpetual Strife Preferred Stock.
The capital raise follows a similar structure to Strategy’s previous fundraising rounds, many of which directly funded large-scale Bitcoin purchases.
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