What to know:

• Strategy (MSTR) appears to meet the S&P 500 inclusion criteria as Bitcoin’s monthly close at $107,750 boosts its earnings to $11 billion and elevates EPS to $39.50, according to analyst Jeff Walton.
• The perpetual preferred shares of STRK surged 15% in one day to reach $121, outperforming both Bitcoin and the S&P 500 as investors speculate on possible inclusion in the index.
• These stocks also offering yields higher than the U.S. interest rate could attract further investment interest, especially amidst calls by Donald Trump for a reduction in interest rates.

Disclaimer: The analyst mentioned above possesses shares in Strategy (MSTR).

Strategy’s perpetual preferred shares are potentially anticipating the Bitcoin-accumulating company’s inclusion in the S&P 500 after the largest cryptocurrency recorded a peak monthly closure, which analysts suggest has boosted its quarterly earnings sufficiently for the U.S. equity benchmark inclusion.

However, there might be more than one reason for their increasing popularity. The stocks provide yields that surpass the Federal Reserve’s target rate, which is currently between 4.25%-4.5%, a factor that could significantly entice investor interest.

With the official announcement regarding S&P 500 inclusion not anticipated until September, MSTR stocks experienced a 5% increase on Monday, climbing above $400, their highest price since May 22. Meanwhile, the STRK perpetual preferred shares escalated by 15% and STRF rose 7.5%. The STRD shares also saw an increase of 3%.

Bitcoin ended June at $107,750, translating to a substantial earnings impact of approximately $11 billion for Strategy, which is based in Tyson Corner, Virginia. This increase pushes the EPS to about $39.50, sufficient for the company to record a net positive figure from the preceding four quarters—an essential milestone before S&P 500 listing.

Typically, shares tend to appreciate when listed, or expected to be listed, in the benchmark due to the augmented demand from institutions barred from investing in companies not included in the S&P 500.

As STRK advanced to $121 with an effective yield of 6.6%, its return since its launch on February 6 has reached 42%, outperforming Bitcoin’s 11% rise and the S&P 500’s 2%. These figures do not consider associated dividend payments with these products.

Collectively, these developments prompt discussions on whether the recent market behaviors reflect anticipatory moves ahead of MSTR’s potential inclusion in the S&P 500.