Michael Saylor’s MicroStrategy, now Strategy, may be days away from a historic Wall Street milestone but the gatekeeper, once again, is Bitcoin.
According to financial analyst Jeff Walton, there’s a 91% chance Strategy qualifies for the S&P 500 index by the end of Q2. Yes, of course there’s a catch. Bitcoin must stay above $95,240 until June 30.
That leaves just days for the market to hold steady and the odds, as of now, are on Saylor’s side.
To join the S&P 500, a company needs to show cumulative positive earnings across the last four quarters. That’s where Bitcoin comes in. Strategy holds 592,345 BTC, the largest stash among any public company. Since January, those holdings are marked to market value under the ASU 2023-08 accounting rule, meaning every price move flows straight into net income.
Walton breaks it down simply: “If [Bitcoin] drops below that, Strategy… will not have the earnings in Q2 be more than the last three quarters combined.”
In other words – a single sharp dip could wipe out their shot.
But how likely is a double-digit crash over six days? Not very, says Walton, who pulled historical data on Bitcoin’s short-term volatility since 2014.
Out of all six-day periods since then, BTC has dropped more than 10% only 8.7% of the time. That means 91.3% of the time, it holds the line – roughly matching Walton’s forecast for Strategy’s odds.
Those chances only improve by the day. Over five days: 92.4% chance of no 10% drop. With just one day left? 97.6%.
Still, it’s not smooth sailing. Over the weekend, rising tensions between Iran and Israel briefly pushed BTC below $100K – the lowest since early May. At press time, it’s bounced back to around $106,200.
The point here is that this is crypto and anything can still happen, so don’t pull out your party hats just yet.
If Strategy makes it in, it would become the second crypto-linked firm to join the S&P 500 this year, following Coinbase in May. For the crypto industry, it’s another step toward mainstream acceptance.
“It cements the legitimacy of an entire asset class,” said Meryem Habibi, Chief Revenue Officer at Bitpace. (Cointelegraph)
Strategy is already in the Nasdaq-100 as of late 2024. An S&P 500 entry would take that credibility one level higher and once again prove that Saylor’s Bitcoin gamble is truly paying off.
The countdown is on.
Strategy holds 592,345 BTC, the largest stash among any public company. Under new accounting rules (ASU 2023-08), Bitcoin’s market value directly impacts their earnings, which must be cumulatively positive for S&P 500 eligibility.
According to analyst Jeff Walton, Strategy (formerly MicroStrategy) has a 91% chance of qualifying for the S&P 500 by the end of Q2 2025, provided Bitcoin’s price stays above $95,240 until June 30.
Corporate Bitcoin purchases, especially large ones like Strategy’s, increase demand and reduce the liquid supply of Bitcoin. While direct treasury buys contribute, institutional interest through ETFs is a significant driver, creating a potential supply shock.
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