9 months ago
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MicroStrategy’s remarkable performance this year positions it close to qualifying for inclusion in the S&P 500 Index.
As Bitcoin’s (BTC) price surged to nearly $53,000, MicroStrategy Inc (NASDAQ: MSTR), the largest corporate owner of the cryptocurrency, has seen its profit soar to over $4 billion from holdings of over $10 billion. This dramatic rise in MicroStrategy’s fortunes is not only a testament to the company’s visionary approach but also raises the possibility of its inclusion in the prestigious S&P 500 Index.
MicroStrategy’s Bitcoin Holdings and Profit Surge
MicroStrategy’s bullish stance on Bitcoin has been evident since the third quarter of 2020 when it began accumulating the digital asset. The company’s most recent investor presentation revealed that by the end of January, MicroStrategy held approximately 190,000 Bitcoin, acquired for a total of $5.93 billion, at an average price of $31,224 per coin.
This strategic investment has paid off handsomely, with the company’s profit from its Bitcoin holdings doubling from nearly $2 billion in December to over $4 billion, thanks to Bitcoin’s remarkable rally of more than 22% since the beginning of 2024. Bitcoin climbed to $52,800 early Thursday morning. However, the price has since returned, trading at $51,909 at press time.
MicroStrategy’s co-founder and executive chairman, Michael Saylor, attributes Bitcoin’s recent price surge to spot Bitcoin Exchange-Traded Funds (ETFs) listing. These ETFs have introduced an imbalance in the supply-demand dynamics, fueling a surge in demand for Bitcoin, particularly among retail investors. The participation of prominent institutional investors, such as BlackRock Inc (NYSE: BLK), in the spot Bitcoin ETF space, has further increased Bitcoin’s bullish momentum.
Embracing its success in the Bitcoin market, MicroStrategy has announced plans to rebrand itself as a Bitcoin development company. Saylor emphasizes that this strategic move aligns with the company’s mission to accumulate more Bitcoin and contribute to the growth of the Bitcoin network.
Unlike traditional investment trusts, MicroStrategy’s model offers greater flexibility, enabling the company to develop software, generate cash flow, leverage capital markets, and accumulate Bitcoin for its shareholders while fostering the expansion of the Bitcoin ecosystem.
MicroStrategy’s Path to S&P 500 Inclusion
MicroStrategy’s remarkable performance this year positions it close to qualifying for inclusion in the S&P 500 Index. With a market capitalization of approximately $12.4 billion, the company is shy of the index’s requirement of $15.8 billion. The surge in MicroStrategy’s shares, which have risen by 52% over the past month, alongside Bitcoin’s price appreciation, has increased its prospects for S&P 500 inclusion.
Joe Burnett, Senior Product Marketing Manager at Bitcoin financial platform Unchained, commented in a post on X that MicroStrategy’s entry into the S&P 500 could trigger an influx of demand from passive investors tracking the index, potentially catalyzing a positive feedback loop that benefits both the company and Bitcoin.
While MicroStrategy’s inclusion in the S&P 500 holds immense potential, it is not guaranteed. The company must meet stringent criteria, including domicile in the United States, sufficient liquidity, and sustained profitability over the previous four quarters.
