- MicroStrategy approaches S&P 500 inclusion, signaling mainstream Bitcoin adoption.
- Inclusion could integrate Bitcoin into nearly every investment portfolio.
MicroStrategy, a titan in corporate Bitcoin investment, is on the verge of a significant milestone that could integrate Bitcoin into mainstream investment portfolios. As of February 15, MicroStrategy has risen to the 535th position among the U.S.’s largest publicly-listed companies, following a remarkable 46% surge in its stock price over just eight days.
This leap forward brings the firm closer to meeting the stringent criteria for inclusion in the prestigious S&P 500 index.
Criteria for S&P 500 Inclusion: The Hurdles Ahead for MicroStrategy
Inclusion in the S&P 500 requires a company to not only have a substantial market capitalization but also to demonstrate consistent profitability, among other financial health indicators. Currently, the threshold for market capitalization stands at $15.8 billion.
MicroStrategy, with a market cap of $12.1 billion, would need its stock price to climb from $718 to $937 to cross this threshold, assuming other conditions are already met. Moreover, the company has shown a positive sum of profits over the last four quarters, indicating its financial viability and potential for inclusion in the index.
Should MicroStrategy secure a spot in the S&P 500, it would mark a watershed moment for Bitcoin’s integration into traditional investment portfolios. This inclusion could trigger a “massive positive feedback loop,” significantly increasing Bitcoin exposure across a wide array of investment vehicles, including 401(k)s, pension funds, and the standard 60:40 portfolios.
The significance of this exposure cannot be overstated, as the three largest exchange-traded funds (ETFs) by assets under management—all of which track the S&P 500—would automatically incorporate MicroStrategy, thereby weaving Bitcoin into the fabric of mainstream investment strategies.
For a deeper dive into these developments, a detailed explanation is available in this Youtube video, which can be watched here.
The Road Ahead
With a portfolio of 190,000 BTC, acquired at an average price of $31,224, MicroStrategy’s foray into Bitcoin has already proven profitable, with the firm sitting on a $3.9 billion gain. This strategic pivot towards Bitcoin under the guidance of founder and chairman Michael Saylor has redefined MicroStrategy’s business direction.
MicroStrategy is a #Bitcoin Development Company.
— Michael Saylor⚡️ (@saylor) February 9, 2024
Saylor’s announcement on February 9, transitioning from a business intelligence firm to a “Bitcoin development firm,” underscores the company’s commitment to Bitcoin and its underlying technology.