MicroStrategy's Step Towards the S&P 500 and What It Means for Bitcoin

MicroStrategy, a company known for its significant Bitcoin holdings, is experiencing a surge in its stock value along with Bitcoin's rise, owning over $10 billion in BTC. This increase brings the company close to being eligible for inclusion in the S&P 500 Index, a prestigious list of 500 major U.S. companies. To join, a company must have a market capitalization of at least $15.8 billion, and MicroStrategy is currently valued at around $12.4 billion according to Yahoo Finance.The company's stock has jumped by 52% in the last month, while Bitcoin's price has increased by 22.5%. MicroStrategy is often seen as a Bitcoin ETF alternative, offering investors Bitcoin exposure alongside other benefits. Being added to the S&P 500 could attract a wave of new investors, including those not specifically looking for Bitcoin investments.

Joe Burnett from Unchained believes that MicroStrategy's potential S&P 500 inclusion could lead to Bitcoin being indirectly added to many investment portfolios. The company's strategy to buy as much Bitcoin as possible could be further supported by increased stock values, facilitating more Bitcoin purchases.However, CoinShares' James Butterfill warns that using stocks like MicroStrategy as a direct substitute for Bitcoin can be risky due to the many variables affecting stock performance. He also notes that being added to the index doesn't always result in long-term price increases.

For MicroStrategy to be considered for the S&P 500, it must meet several criteria beyond the market cap, including being U.S.-based, having sufficient liquidity, and showing positive earnings over the last four quarters. Unlike MicroStrategy, Coinbase, despite its larger market cap, has not been included in the S&P 500 due to profitability challenges. Additionally, Bitcoin ETFs are not eligible for inclusion in the index.