First Bitcoin Holder Might Enter S&P 500, And It's Not MicroStrategy

Matthew Sigel, head of digital assets research at prominent investment firm VanEck, believes that Block (formerly Square) could be the first Bitcoin holder to make an appearance on the flagship S&P 500 stock market index. 

There are several criteria that stocks have to fulfill in order to be eligible for inclusion. First of all, the market cap of such a company should be above the $18 billion mark. Second, the portion of shares held by public investors should be above 10%. Third, the company is supposed to be profitable in the last quarter while also having the previous four quarters in the green in terms of GAAP earnings.

Some additional requirements include having high liquidity and being domiciled in the U.S. 

"Block achieved the last criteria (earnings) after 1Q24 earnings. However, S&P 500 inclusion is not strictly formulaic but is determined at the discretion of the Index Committee," he said. 

Block initially bought $50 million of Bitcoin in October 2020 before purchasing another $170 million in February 2021. 

CEO Jack Dorsey, who is also known as the former head of Twitter (now X), is known as a longtime proponent of Bitcoin.  

Other crypto contenders 

As reported by U.Today, MicroStrategy (MSTR), the leading corporate Bitcoin holder, was recently added to the tech-heavy Nasdaq-100 index. 

That said, MSTR is highly unlikely to become part of the S&P 500 anytime soon despite its impressive run in 2024. 

Eric Balchunas, Bloomberg's senior ETF analyst, recently opined that the S&P 500 inclusion committee might block the addition of the stock even if it ends up qualifying.  

As reported by U.Today, Bitwise predicted that Coinbase would be included in the S&P 500 this year. However, Sigel admits that such a pick would be more controversial for the committee compared to Block Inc, given that Coinbase is a crypto-native company.