[NEWS]Strategy Could Be Included in the S&P 500 in June

Strategy (formerly MicroStrategy) is increasingly likely to be included in the S&P 500 by June 20, 2025.

A key prerequisite for this inclusion is that Bitcoin's closing price in Q1 2025 must exceed Strategy’s average purchase price of $96,337. If Bitcoin's price falls below this threshold, the company may be unable to offset past losses, making S&P 500 inclusion more difficult.

Currently, Strategy meets nearly all the eligibility requirements for S&P 500 inclusion, with one remaining condition: the company must report a positive GAAP (Generally Accepted Accounting Principles) net income for the past 12 months.

To meet this requirement, Strategy needs to generate $1.113 billion in revenue in Q1 2025, which would require Bitcoin's closing price to remain above $96,337.

If the company’s Bitcoin holdings remain unchanged, Bitcoin surpassing this price target would significantly enhance the feasibility of S&P 500 inclusion. Analysts suggest that Strategy’s adoption of the revised Financial Accounting Standards Board (FASB) guidelines has strengthened its case for inclusion in the index.

Additionally, cumulative net profit must be positive, meaning Strategy must have reported positive net income for the past four quarters. This ensures that the company meets the financial evaluation criteria set by the S&P 500 selection committee.

The S&P 500 selection committee evaluates companies based on financial stability, market capitalization, liquidity, and overall market impact. The committee also considers a company's effect on market stability, making it crucial to assess how Strategy’s Bitcoin-dependent financial structure will be perceived in the selection process.

The global trend of adding Bitcoin to investment portfolios is accelerating.

On the 17th, Metaplanet announced the purchase of an additional 269 BTC, bringing its total holdings to 2,031 BTC. The total cost of this purchase amounted to approximately $26 million, with an average purchase price of around $96,300 per Bitcoin.

The company is actively pursuing a Bitcoin treasury strategy, aiming to enhance shareholder value by increasing its Bitcoin holdings. This recent acquisition appears to be part of a strategic asset management approach, taking into account Bitcoin's price fluctuations. Given this direction, further capital raising and additional Bitcoin purchases are highly likely in the near future.

Metaplanet has set a target of holding 21,000 BTC by the end of 2026, a goal that will be significantly influenced by Bitcoin market trends. The company’s Bitcoin strategy and how it evolves in response to market conditions will be closely watched.

Impact of Bitcoin Price Volatility on Companies

Bitcoin price volatility affects not only Strategy’s potential inclusion in the S&P 500 but also companies integrating Bitcoin into their portfolios. If Bitcoin's price rises, the valuation of their holdings increases, leading to improved earnings. Conversely, if prices decline, companies face unrealized losses that could negatively impact their financial performance.

A Bitcoin price surge can also boost market sentiment, potentially driving stock prices higher. Notably, if Bitcoin-related companies are included in the S&P 500, institutional investor interest is expected to rise, leading to further capital inflows. However, Bitcoin’s high volatility remains a key risk factor, as sharp price swings can cause significant fluctuations in stock prices.

Ultimately, market trends in Q1 2025 will be a critical determinant of the future trajectory for Bitcoin-related companies.

Reference: CoinDesk
Image: Shutterstock

Related articles

MicroStrategy Acquires an Additional 14,620 BTC in Anticipation of Spot Bitcoin ETF Approval

New Business Perspectives in Bitcoin Investment Strategy – Interview with Simon Gerovich