Strategy, formerly known as MicroStrategy, has garnered significant attention as a potential addition to the S&P 500 index. This move could trigger substantial capital inflows, indirectly boosting Bitcoin exposure due to Strategy's large Bitcoin holdings. However, several factors could impede its path to inclusion.
To be included in the S&P 500, a company must meet specific criteria, including market capitalization, profitability, liquidity, and share distribution. Strategy seemingly meets these requirements, boasting a market capitalization exceeding $22.7 billion and a float above the required 50%. Furthermore, the company has demonstrated positive earnings over the past four quarters, a trading history exceeding 12 months, and an average monthly trading volume surpassing 250,000 shares. Strategy reported impressive Q2 2025 results, with $14 billion in operating income, $10 billion in net income, and $114.5 million in total revenue. The adoption of new fair-value accounting standards in January 2025, which allows the company to recognize unrealized gains on its Bitcoin holdings, has further boosted its profitability.
Despite these qualifications, Strategy's significant Bitcoin holdings could be a major obstacle. The S&P 500 index committee might hesitate to include a company so closely tied to the volatile cryptocurrency market. While Strategy's profitability has improved due to Bitcoin's rising value, the committee might view these earnings as unsustainable and not reflective of consistent corporate performance. The source of Strategy's earnings, which relies heavily on unrealized gains from Bitcoin mark-to-market accounting, could be perceived as too volatile.
Another concern is the existing representation of crypto-related firms in the S&P 500. Coinbase and Block are already part of the index, and the committee might be wary of adding another company with significant exposure to the cryptocurrency market. Benchmark analysts suggest that the committee will consider whether additional crypto-linked representation is desirable at this stage. Strategy would be the first company defined by its substantial Bitcoin holdings, which could broaden investor access to Bitcoin exposure through traditional equity investment channels.
Strategy's stock (MSTR) has experienced a downturn recently, falling more than 15% over the past month. This decline could raise concerns about the company's stability and its suitability for inclusion in the S&P 500. Some market observers have criticized Strategy's equity sales for Bitcoin accumulation, which has put pressure on MSTR's share price.
Despite these potential roadblocks, several factors support Strategy's inclusion. The company's robust Q2 2025 results and the increasing acceptance of Bitcoin as a strategic asset strengthen its case. Institutional investors purchasing Strategy shares gain indirect exposure to Bitcoin, reinforcing its role as a strategic asset. The U.S. Strategic Bitcoin Reserve's acquisition of 1 million BTC in March 2025 and the approval of spot ETFs have normalized Bitcoin as a reserve asset. If Strategy is added to the S&P 500 Index, it would join Coinbase and Block as only the third major crypto-related firm in the coveted benchmark.
The decision to include Strategy in the S&P 500 will likely depend on the index committee's assessment of the company's long-term sustainability and its comfort level with Bitcoin exposure. While Strategy meets the objective criteria for inclusion, the subjective considerations regarding its business model and the overall market environment could ultimately determine its fate.
