91% Chance MSTR Joins S&P 500: Bitcoin Gains Index Asset Status
Could MicroStrategy Leverage bitcoin Gains for S&P 500 Inclusion?
MicroStrategy’s S&P 500 Prospects Depend on bitcoin‘s Price Stability
MicroStrategy, now known as Strategy (MSTR), may be on the verge of a significant achievement in its bitcoin investment strategy. If bitcoin maintains its current valuation, the company could soon fulfill the criteria necessary for inclusion in the S&P 500 index.
The potential for inclusion hinges on meeting specific financial benchmarks related to reported earnings. Financial analyst Jeff Walton has assessed that the likelihood of Strategy meeting these requirements stands at an impressive 91%.
Walton indicates that bitcoin would need to dip below $95,240 before the end of June for Strategy’s Q2 earnings to fall below the qualifying threshold. This scenario would necessitate a decline of over 10% in a very short timeframe.
As of June 23, Strategy possesses 592,345 bitcoins, acquired at an average price of $70,666, amounting to a total investment of around $41.84 billion. With bitcoin trading at $107,213 on June 25, the value of its cryptocurrency holdings surpasses $63.5 billion.
These unrealized gains are crucial for Strategy’s earnings report, which is the final element under consideration for S&P 500 eligibility.
Historical Trends Favor Strategy’s Chances
Walton’s 91% probability estimate is based on an analysis of bitcoin‘s price movements over 3,928 rolling six-day trading periods from September 2014 to June 2025.
He noted, “Since September 17, 2014, bitcoin has experienced a drop of more than 10% in only 343 instances during any six-day period. In contrast, there were 3,585 periods where such a decline did not occur.” This translates to a mere 8.7% of instances witnessing that level of drop.
To further validate this assessment, Walton examined the same six-day periods following the launch of BlackRock’s iShares bitcoin Trust (IBIT), which he considers a pivotal moment in the market. Since IBIT’s introduction, bitcoin has avoided a 10% or greater decline in 96.6% of comparable periods, indicating that institutional involvement and ETF flows have contributed to a more stable market.
Time is also a critical factor. As the quarter draws to a close, the opportunity for a significant short-term drop diminishes. Walton points out that even if bitcoin were to fall to $104,000 instead of $95,000, the necessary percentage drop would decrease to 8.42%, still within historically favorable limits.
If bitcoin remains stable or increases, the chances of Strategy meeting the S&P earnings criteria will continue to improve.
Other prerequisites for index inclusion are already satisfied. Strategy’s market capitalization exceeds $21 billion, and its average daily trading volume is well above the minimum required for S&P 500 eligibility. This leaves net income as the only outstanding criterion.
With only a few trading days left in the quarter, the indicators seem to favor Strategy.
Changes in Regulations Impacted Timing
Strategy’s journey toward S&P 500 inclusion began earlier in Q1. The company had already met most structural requirements, including market cap, liquidity, and listing standards.
However, one condition remained unresolved: net profitability over the previous twelve months. To satisfy this requirement, the company needed strong Q1 earnings to offset prior losses and achieve a positive cumulative figure across four quarters.
The turning point came with a revised accounting rule from the Financial Accounting Standards Board. This new standard mandates that companies holding digital assets recognize them at fair market value, allowing unrealized gains to contribute directly to reported net income. Previously, only impairments were accounted for, excluding any potential upside from price increases.
For companies like Strategy, which hold significant bitcoin assets, this change dramatically altered how market performance translated into earnings.
Despite the rule’s introduction, timing remained crucial. The closing price of bitcoin at the end of the quarter ultimately determined whether Strategy could meet the profitability requirement.
Analyst Richard Hass estimated that the company needed $1.113 billion in Q1 net income to satisfy the S&P earnings condition. This figure would have been achievable only if bitcoin closed above $96,337 on March 31, based on Strategy’s then-total of 478,740 BTC.
However, bitcoin ended the quarter at $82,548, falling short of the necessary threshold. Consequently, while the fair value rule improved reported earnings, the final price left a significant gap between valuation and the level needed to offset earlier losses.
Strategy had reported a $671 million net loss in Q4 2024, primarily due to the previous accounting rule that marked bitcoin down to below $16,000 per coin, despite it trading above $94,000 at year-end. This discrepancy left the company with a substantial earnings deficit heading into Q1, and the new rule, while beneficial, was insufficient to bridge that gap.
Implications of MSTR’s S&P 500 Inclusion for bitcoin
Should Strategy gain entry into the S&P 500, it would serve as a conduit for bitcoin to enter mainstream equity portfolios without requiring formal approval for cryptocurrency investments.
In this scenario, the company would be assessed not only as a proxy for bitcoin exposure but also as a publicly listed entity expected to adhere to broader financial and governance standards.
Approximately $15.6 trillion in global assets are benchmarked to the S&P 500, with around $7.1 trillion held in index funds that replicate its composition. Once Strategy qualifies, these funds would be compelled to allocate a portion of their capital to MSTR shares.
This mechanism creates an indirect yet significant pathway for traditional asset managers, many of whom are restricted from holding bitcoin directly, to gain exposure through equity ownership.
Even a minimal 0.01% allocation across S&P-linked assets could result in over $1.5 billion in new demand for MSTR stock.
The impact on bitcoin would be gradual but significant. If MSTR becomes a core holding among major equity funds, bitcoin’s integration with traditional asset classes could be strengthened.
As of June 25, Strategy holds approximately 2.8% of bitcoin’s total circulating supply. An increase in MSTR demand driven by index purchases would reinforce bitcoin’s status as a macro-linked asset, responding to both cryptocurrency cycles and broader equity market movements.
This shift would also alter how Strategy is perceived. Since its strategic pivot in 2020, the company has functioned more like a bitcoin ETF than a traditional software business.
However, S&P 500 inclusion would position Strategy within a peer group characterized by consistent revenues, dividend distributions, and sector-specific exposures.
This new standing would elevate expectations regarding financial reporting, operational stability, and corporate governance. It would also lead to more frequent index reviews and potential adjustments in weighting, particularly if volatility remains high.
A useful comparison can be drawn with Tesla’s entry into the S&P 500 in December 2020, which attracted over $80 billion in inflows as passive and active managers adjusted their portfolios. Although Strategy’s market cap is smaller, its high correlation with bitcoin could make it an effective bridge between digital assets and traditional capital markets.
This bridge may become increasingly vital as the cryptocurrency landscape moves closer to regulatory clarity and standardized accounting practices.
If MSTR secures a spot in the index, bitcoin effectively enters alongside it, transforming who holds exposure, how it is classified, and its role within the broader financial ecosystem.
