MicroStrategy’s S&P 500 Listing to Expose Millions to Bitcoin

MicroStrategy, the company with the largest holding of Bitcoin, is making progress towards being included in the S&P 500 index. This would be a significant milestone, as it could lead to more Bitcoin-based firms being added to investment portfolios. MicroStrategy would need to meet certain criteria, including a minimum market capitalization requirement and a positive profit trend over the previous four quarters. It would also need to have a majority of its shares traded publicly. Currently, MicroStrategy’s market cap falls short of the required amount, so its stock price would need to increase for it to be eligible. Even if the criteria are met, the final decision lies with the S&P’s 11-member executive committee.

If MicroStrategy is included in the S&P 500, it could have a widespread impact on investment portfolios. Joe Burnett, a senior product marketing manager at Bitcoin financial services firm Unchained, believes that Bitcoin would automatically become a part of nearly every ETF portfolio, including traditional retirement accounts and pension funds. The three largest exchange-traded funds in the market, which track the S&P 500, have over $400 billion in assets each. MicroStrategy’s weight in these funds would be around 0.01%.

The S&P 500 currently has a market cap of $41.9 trillion, so if MicroStrategy were included, it would attract approximately $12 billion in passive capital allocation. This would lead to automatic buying of MicroStrategy’s stock, driving up its price and potentially attracting more investment. MicroStrategy currently holds 190,000 BTC, which it purchased at an average price of $31,224. This investment has already resulted in a profit of $3.9 billion for the company.

It’s worth noting that MicroStrategy’s chairman, Michael Saylor, has recently announced that the company is transitioning from a business intelligence firm to a “Bitcoin development firm.” This strategic shift aligns with their focus on Bitcoin as a long-term investment and suggests that they are confident in the future of the cryptocurrency.

MicroStrategy’s potential inclusion in the S&P 500 has the potential to bring Bitcoin exposure to a wide range of investment portfolios. The company still needs to meet certain requirements and gain approval from the S&P’s executive committee before this can happen.

Montgomery Bonnette

Montgomery Bonnette

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