Potential Inclusion of MicroStrategy in S&P 500

MicroStrategy could be on track for potential S&P 500 inclusion by June 20 if Q1 2025 earnings manage to offset prior losses from Bitcoin investments.

However, Bitcoin needs to close above its average purchase price of $96,337 during this quarter. A lower close would force the company to book losses, potentially preventing S&P inclusion.

Holy Grail of the Financial Markets

According to an analysis by Richard Hass, if the holdings remain unchanged, Bitcoin must finish Q1 above $96,337 for MicroStrategy to meet the required positive trailing earnings. Hass states, “Based on Q4 2024 earnings of -$671 million, MicroStrategy requires $1.113 billion in Q1 2025 earnings to convert to positive earnings and qualify for the S&P 500.”

Mark Palmer, a Benchmark analyst, asserts, “MicroStrategy’s adherence to the new FASB guidelines enhances its chance for S&P 500 entry. Given its better performance compared to current index members, exclusion would be unjustifiable.”

Inclusion would validate MicroStrategy’s Bitcoin strategy, indirectly increasing investor exposure to Bitcoin as all S&P 500 funds would hold its shares.