Here’s the First Company with a Bitcoin Strategy Set to Join the S&P 500

Block, the financial services and digital payments company, is on track to potentially become the first company with a clear Bitcoin strategy to join the S&P 500, according to Matthew Sigel, the head of digital assets research at VanEck.

Sigel shared his insights, explaining that several criteria must be met for a company to be added to the index, which tracks the largest 500 companies in the U.S. by market capitalization.

For a company to qualify, it must have a market cap over $18 billion, a public float of at least 10%, positive earnings in the most recent quarter, and positive GAAP earnings over the last four quarters. Additionally, the company must exhibit high liquidity, have been public for more than 12 months, and be based in the U.S.

According to Sigel, Block met the earnings criteria by the first quarter of 2024. However, he pointed out that S&P 500 inclusion is not entirely formulaic and is ultimately decided by the Index Committee.

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Sigel noted that companies that meet these criteria have historically been included in the index within three to 21 months. When discussing Tesla, he emphasized that while Tesla holds Bitcoin, it does not have an explicit Bitcoin strategy like Block, which commits 10% of its monthly Bitcoin profits to Bitcoin investment on a recurring basis.

While Coinbase also meets the criteria, Sigel suggested it could be a more contentious choice for the committee due to its focus on the crypto industry. He also mentioned that the S&P 500’s diversification efforts could allow for more financial firms to be added to the index, with financial companies currently comprising about 14% of the index.

Kosta Gushterov